Home Depot sales beat on housing recovery, outdoor demand
By Yashaswini Swamynathan
(Reuters) - Home Depot Inc (HD.N: Quote), the world's largest home improvement chain, reported better-than-expected sales, boosted by an improving housing market and mild weather in the holiday quarter that encouraged customers continue outdoor activities and home renovations.
Shares of the company, which also raised its quarterly dividend by 17 percent and announced a $5 billion share buyback plan, rose as much as 3.5 percent in morning trading on Tuesday.
Home Depot is benefiting from a pent-up demand for houses after the 2008 financial recession. Low interest rates and growth in jobs, wage and credit are also spurring customers to spend more on renovating homes.
Warmer-than-average weather during the holidays also helped Home Depot drive sales across a number of outdoor categories as activities such as gardening carried on for much longer, Conlumino analyst Carter Harrison said.
Favorable weather trends in the quarter helped sales growth by about $100 million, Ted Decker, executive vice president of Merchandising, said on a conference call.
Net sales rose 9.5 percent to $20.98 billion in the fourth quarter.
Sales at stores open for more than a year rose 8.9 percent in the United States in the quarter ended Jan. 31. Analysts on average expected sales to rise 5.3 percent, according to research firm Consensus Metrix.
The results bucked a broader retail trend of disappointing holiday quarter sales as shoppers spent more on big-ticket items such as home improvement and automobiles, instead of discretionary items such as apparel. Continued...