Home Depot beats sales and profit estimates on housing market strength

Home Depot beats sales and profit estimates on housing market strength

Home Depot Inc beat quarterly sales and profit estimates on Tuesday, boosted by a strong U.S. housing market and demand during the holiday season.

Men lift a sheet of plywood at a Home Depot store ahead of the arrival of Hurricane Dorian in Miami
Men lift a sheet of plywood at a Home Depot store ahead of the arrival of Hurricane Dorian in Miami, Florida, U.S. August 30, 2019. REUTERS/Marco Bello

REUTERS: Home Depot beat quarterly sales and profit estimates on Tuesday (Feb 25), boosted by a strong US housing market and demand during the holiday season.

Shares of the home improvement chain, considered a barometer for the economic health of US households, rose 2.6 per cent to US$245.91 in premarket trading.

The US housing market has benefited from the lowest mortgage rates in more than three years after the Federal Reserve lowered borrowing costs thrice in 2019.

Sales of existing homes, which make up about 90 per cent of US home sales, surged 9.6 per cent on a year-on-year basis in January, the National Association of Realtors said on Friday.

The sales, however, declined on a seasonally adjusted annual rate last month, due to a dearth of houses on the market, though the supply squeeze is likely to ease with building permits and under-construction houses at levels last seen nearly 13 years ago.

Same-store sales at Home Depot rose 5.2per cent in the fourth quarter ended Feb. 2, above expectations of a 4.8per cent increase, according to IBES data from Refinitiv.

Net sales fell 2.7per cent to US$25.78 billion, but beat analysts' average expectation of US$25.76 billion.

Net earnings rose to US$2.48 billion, or US$2.28 per share, from US$2.34 billion, or US$2.09 per share a year earlier. Analysts were expecting earnings of US$2.10 per share.

Source: Reuters

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