Home Depot sees boost from storms
Destructive hurricanes in Southern U.S. push up sales as homeowners rebuild
The hurricanes that ravaged Texas, Florida and Puerto Rico and the rebuilding effort that has begun are buoying the bottom line of Home Depot.
The home-improvement chain said Tuesday that it saw a sales surge in the last quarter and expects the uptick to continue through the rest of the year as victims of hurricanes Harvey and Irma reconstruct their homes.
The need for building supplies, from plywood and generators to wiring and shutters, led to about $282 million in hurricane-related sales at Home Depot stores open at least a year, the company reported Tuesday.
Storm-related purchases contributed to overall sales of $25 billion during the third quarter — an 8.1 per cent bump as compared to the same period last year, and a 7.7 per cent increase at U.S. stores that had been open at least 12 months, a key industry measure that takes change in the number of stores out of the equation.
The continued recovery effort in the wake of the hurricanes, coupled with a strong economy that is spurring Americans to remodel or buy new homes, led the home improvement chain to increase its financial forecast for the year.
The company now expects sales to be up roughly 6.3 per cent, and diluted earnings to leap roughly 14 per cent to $7.36 a share.
“We expect to see ... sales continue to increase,” Craig Menear, Home Depot’s CEO said in an earnings call with investors Tuesday.
The third quarter brought in $2.2 billion in net earnings, or $1.84 per diluted share, up from $2 billion, or $1.60 per diluted share during the comparable period last year.
Earnings also beat the expectations of S&P Global analysts by two cents.
Home Depot earned $2.17 billion in the third quarter.