Home Depot sales exceed expectations, but profit misses
By Nandita Bose and Sruthi Ramakrishnan
(Reuters) - Home Depot Inc (HD.N: Quote) on Tuesday reported slightly higher-than-expected quarterly sales as an improving job market encouraged home owners to increase spending on renovations, but earnings came in just below Wall Street estimates.
Sales increased despite the September disclosure from the world's largest home improvement chain that its data systems were breached, probably affecting about 56 million payment cards.
Home Depot said it might face other breach-related costs, including legal action, that could have a material impact on results for the current quarter and beyond.
Sales at stores open at least a year rose 5.2 percent in the third quarter ended Nov. 2, beating the analysts' average estimate of 5 percent, according to research firm Consensus Metrix.
Same-store sales increased 5.8 percent in the United States, where Home Depot has more than 85 percent of its stores.
Net sales rose 5.4 percent to $20.52 billion, while analysts on average had expected $20.47 billion, according to Thomson Reuters I/B/E/S.
"It is very difficult for us to determine if there is any impact (from the data breach)," Chief Executive Officer Craig Menear said in a conference call. "We have had positive transaction growth for each month during the quarter. That represents consumers' confidence."
The retailer's shares were down 1.9 percent at $96.20 in afternoon trading. Besides the earnings miss, analysts also attributed the weakness to a recent run-up in the stock. As of Monday's close, it had risen 6.5 percent since Home Depot revealed the data breach Continued...