Re­cov­ery in US hous­ing mar­ket drives Home De­pot sales beat

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

Home De­pot Inc (HD.N), the world's No.1 home im­prove­ment re­tailer, re­ported a bet­ter-than-ex­pected rise in quar­terly same-store sales, helped by in­creased home re­mod­el­ing ac­tiv­ity in the United States and a re­cov­ery in the hous­ing mar­ket. The com­pany also raised its full-year sales and profit forecast on Tues­day. Home De­pot's shares, which hit a record high on Mon­day, rose slightly in pre­mar­ket trad­ing.

The com­pany's same-store sales rose 4.2 per­cent in the sec­ond quar­ter, beat­ing the av­er­age an­a­lyst es­ti­mate of 3.5 per­cent, ac­cord­ing to re­search firm Con­sen­sus Metrix. De­mand for in­door home im­prove­ment prod­ucts was strong in the quar­ter, mak­ing up for weak de­mand for out­door prod­ucts such as ex­te­rior paint and gar­den­ing equip­ment in May and June due to heavy rain in parts of the United States, Wed­bush Se­cu­ri­ties an­a­lyst Seth Basham wrote in a note ahead of the re­sults.

U.S. home­builder sen­ti­ment rose in Au­gust to its high­est level in al­most a decade, the Na­tional As­so­ci­a­tion of Home Builders said on Mon­day. Smaller ri­val Lowe's Cos Inc (LOW.N) is sched­uled to re­port re­sults on Wed­nes­day. Home De­pot raised its profit forecast for the year end­ing Jan­uary to $5.31-$5.36 per share from $5.24-$5.27.

The com­pany said it now ex­pected sales to grow about 5.2-6.0 per­cent, higher than the 4.2-4.8 per­cent it forecast ear­lier, partly due to the $1.63 bil­lion ac­qui­si­tion of home prod­ucts sup­plier In­ter­line Brands Inc ISHLDI.UL last month. Home De­pot also raised its same-store sales growth forecast to about 4.1-4.9 per­cent from 4.0-4.6 per­cent.

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