August 19, 2014
A 6.4% second quarter same store sales increase at U.S. stores enabled Home Depot to handily exceed analysts’ profit estimates and prompted the company to increase its full year outlook.
The nation’s largest home improvement retailer said its sales for the quarter ended August 3 increased 5.7% to $23.8 billion and net income grew 14.2% to $2.1 billion from slightly less than $1.8 billion the prior year. Earnings per share increased 22.6% to $1.52, seven cents better than analysts forecast, from $1.24 the prior year. Home Depot’s profit performance was aided during the quarter by aggressive share repurchase activity which reduced the number of outstanding shares by 6.2%. The company spent $3.5 billion during the first six months of the year buying its own shares.
“In the second quarter, our spring seasonal business rebounded, and we saw strong performance in the core of the store and across all of our geographies,” said Frank Blake, Home Depot’s chairman and CEO.
The company’s overall same store sales growth, including locations in Canada and Mexico was 5.8%. The growth was driven by a 4.2% increase in the number of transactions and a 1.8% increase in average transaction size which was $58.43 in the second quarter of 2014 compared to $57.39 in the second quarter the prior year.
Based on the strong second quarter performance, Home Depot confirmed its forecast for 2014 sales growth of 4.8% and increased its earnings per share target to $4.52. The company also said it planned to spend another $3.5 billion during the back half of the year buying its own shares.
Source: Retailing Today
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