Home Depot shares surge amid disaster recovery
Sales at Home ATLANTA — Depot surged during the third quarter, a period marked by massive rebuilding efforts after severe hurricanes struck Florida and Texas, wildfires consumed entire neighborhoods in the West and earthquakes rattled Mexico.
The Atlanta-based home improvement retailer is one of the inadvertent beneficiaries after catastrophes, including hurricanes Harvey and Irma, shaved as much as at least one-half of 1 percentage point off annual growth for the U.S. in the same quarter. Major department stores that reported third-quarter results last week said that the storms had hurt their sales.
Home Depot Inc., which is furnishing a lot of material for the recovery, raised its outlook for the year Tuesday.
“The devastation caused by hurricanes and wildfires has been anything but a disaster for Home Depot, with the rebuilding efforts pushing already strong sales growth even higher,” writes Neil Saunders, the managing director of Global-Data Retail.
Home Depot has been one of the bright spots in retailing as it benefited from Americans plowing money into their homes and it created a loyal following.
Homebuilding has been sliding this year, but economists remain optimistic that the low level of unemployment will soon spark a rebound in sales and construction.
And Home Depot’s recent performance “continues to paint a better outlook as it sidesteps broader retail woes,” writes Moody’s Vice President Bill Fahy in a report. “Home improvement has remained a retail bright spot even as a myriad of headaches continue to afflict the broader retail industry.”
Home Depot earned $2.17 billion, or $1.84 per share, for the three months ended Oct. 29. That’s 3 cents better than expected, according to a survey by Zacks Investment Research. During the same period last year, the company earned $1.97 billion, or $1.60 per share.
Revenue also rose to $25.03 billion, from $23.15 billion, to beat analyst projections of $24.52 billion. Sales at stores open at least a year, a key gauge of a retailer’s health, rose 7.9 percent. In the U.S., they climbed 7.7 percent.