Home De­pot lifts full-year fore­casts as hur­ri­canes spur de­mand

The Globe and Mail (Prairie Edition) - - REPORT ON BUSINESS - SRUTHI RAMAKRISHNAN

the largest U.S. home-im­prove­ment chain, on Tues­day raised its full-year profit and sales fore­cast af­ter Hur­ri­canes Har­vey and Irma spurred de­mand for gen­er­a­tors, flash­lights and re­build­ing ma­te­ri­als. The Dow com­po­nent, which is rid­ing a mul­ti­year re­cov­ery in the hous­ing mar­ket, got a huge boost in the quar­ter as the hur­ri­canes drove cus­tomers to its stores in the South­ern United States for emer­gency sup­plies. De­spite the spike in sales in the lat­est quar­ter, in­vestors re­main con­cerned about when the U.S. hous­ing re­cov­ery might lose mo­men­tum. Home De­pot’s chief fi­nan­cial of­fi­cer ad­dressed those con­cerns on a postearn­ings con­fer­ence call. “As we think about hous­ing broadly and fears of slow­down, we don’t see that for 2018, 2019 and 2020,” said Carol Tome, cit­ing the stock of older homes and ris­ing prices. A short­age of skilled labour is weigh­ing on the sup­ply of homes and push­ing up costs, with U.S. house prices in­creas­ing for the sev­enth-straight year. Home De­pot’s net sales rose 8 per cent to $25.03-bil­lion (U.S.) in the third quar­ter, helped by a 5-per-cent jump in av­er­age re­ceipt and a 2.5per-cent rise in trans­ac­tions. Sales of big-ticket items, which are priced above $900 and ac­counted for more than one-fifth of to­tal sales, rose 12 per cent. De­mand for ap­pli­ances, vinyl plank floor­ing and prod­ucts such as lumber and hand tools, bought by the com­pany’s con­trac­tor-cus­tomers, drove the jump in big-ticket sales. The com­pany posted dou­ble-digit rise in com­pa­ra­ble sales of hurri- cane-re­lated mer­chan­dise, in­clud­ing gen­er­a­tors, wet-dry vac­uum clean­ers and tarps. Hur­ri­cane-re­lated sales added about $282-mil­lion to com­pa­ra­ble sales in the quar­ter, the com­pany said. Com­pa­ra­ble sales at U.S. stores in­creased 7.7 per cent in the third quar­ter, beat­ing es­ti­mates of 6 per cent, ac­cord­ing to Thom­son Reuters I/B/E/S. Home De­pot (HD) Close: $168.06 (U.S.), up $2.71

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