The Atlanta Journal-Constitution
Home Depot posts record 2Q profit
Despite positive news, stock drops 2.7%; analysts blame ‘Amazon specter’ hovering over all retail.
Home Depot posted revenue and profit gains in the second quarter as consumers continue to improve their properties, though investors didn’t cheer the performance.
Atlanta-based Home Depot’s profit for its latest fiscal quarter was $2.7 billion, up from $2.4 billion a year earlier.
It was the highest quarterly profit the company has ever reported, CEO Craig Menear said.
Comparable store sales rose 6.3 percent overall and 6.6 percent in the United States.
“We were pleased with our results this quarter,” Menear said in a statement accompanying the earnings report.
In a teleconference with reporters and analysts, Menear said there were virtually no soft spots in the company’s performance. Growth was solid “in all geographies,” he said, including all 19 regions and the company’s top 40 markets. Moreover, sales — at least in local currencies — were up in both Mexico and Canada.
The company expects sales during this fiscal year to grow 5.3 percent, he said.
Despite outdoing expectations, Home Depot stock lost $4.09 a share, closing at $150.17, down 2.7 percent.
Analysts said the sell-off might be spurred by industry fears about possible inroads on Home Depot’s business by other aggressive retailers, and one in particular.
“The Amazon specter is everywhere in retail,” Rob Plaza, retail analyst at Key Private Bank, told CNBC. For its part, Home Depot touted its efforts to give customers an easy online option rather than risk losing sales to an Internet seller.
The company said online business now represents 6.4 percent of sales, up 23 percent during the quarter.
The company currently has about 400,000 employees working in nearly 2,000 stores in the United States, in addition to 75 distribution facilities.