Home Depot builds profit, boosts shareholder payouts
Home Depot on Tuesday reported fourth-quarter earnings and sales that topped Wall Street’s expectations as more people shopped at the home improvement giant’s stores.
The company also gave an upbeat financial forecast for 2018 and declared a
15.7% increase in its quarterly dividend, to $1.03 a share. Home Depot said the higher dividend is payable on March 22 to shareholders of record at the close of business on March 8.
Craig Menear, Home Depot’s chairman, CEO and president, said in a statement that the dividend increase reflected “our commitment to create value for our shareholders and our positive outlook for the business.”
As of Friday’s market close, Home Depot shares were up 32% compared with the same point last year.
For the fourth quarter, Home Depot reported net earnings of $1.78 billion, or
$1.52 per diluted share, beating the forecast of $1.74 billion in net earnings from financial analysts surveyed by FactSet. Earnings, adjusted for pretax expenses, were $1.69, seven cents higher than analysts’ prediction.
Along with topping expectations, net earnings rose 2% from the same period last year.
The company had an additional net tax expense of roughly $127 million for the quarter, part of the $150 million Home Depot last month forecast from the impact of the federal tax overhaul approved in December.
Coupled with the previously announced plan to give up to $1,000 in one-time bonuses to employees, the charge reduced quarterly and fiscal 2017 diluted earnings per share by 17 cents, Home Depot said.
Looking forward, Home Depot projected sales growth of roughly 6.5% for the company’s 2018 fiscal year.
It also projected approximately 5% in same-store sales growth, openings of three new stores and roughly $4 billion in share buybacks.
Home Depot reaffirmed its 2020 fiscal targets, projecting total sales ranging from roughly $115 billion to $120 billion. However, that estimate was
0.7% lower than the consensus forecasts in the FactSet survey of financial analysts.
The company’s sales rose in 2017 as people in the southern U.S. and Puerto Rico, whose homes suffered hurricane damage, turned to Home Depot for home repair supplies. The company said it rang up nearly $23.9 billion in net sales during the fourth quarter, up
7.5% from a year earlier.
The average checkout ticket per customer rose 5.5% to $64 during the quarter, and comparable store sales, an important marker for the retail industry, rose 7.5%, Home Depot said.
The chain is diversifying its offerings in an effort to attract more customers.
This month, Home Depot said Tesla would open small kiosks inside the home improvement company’s stores to pitch solar panels and Powerwall electricity storage devices to consumers.
The dividend increase reflected “our commitment to create value for our shareholders and our positive outlook for the business.” Craig Menear Home Depot chairman, CEO and president