Housing recovery boosts Home Depot results; outlook raised

ATLANTA,Tue May 21, 2013 — Home Depot Inc. reported higher-than-expected quarterly results and raised its sales and profit outlook for the year as the world’s largest home improvement chain benefited from a nascent recovery in the U.S. housing market.

The news on Tuesday boosted Home Depot shares by 3.9 percent to $79.75 in premarket trading.

A bubble in the U.S. housing market was at the core of the 2007-2009 financial crisis. During the downturn, Home Depot’s sales at established stores fell more than 20 percent in such markets as Florida and California. In recent quarters, the company has gotten a boost as housing markets have rebounded in regions where it has a heavy presence.

“In the first quarter, we saw less favorable weather compared to last year, but we continue to see benefit from a recovering housing market that drove a stronger-than-expected start to the year for our business,” Chief Executive Officer Frank Blake said.

Despite cooler-than-usual weather in many parts of the United States at the start of the spring selling season, Home Depot’s sales rose 7.4 percent to $19.12 billion in the first quarter ended on May 5. That topped the analysts’ average estimate of $18.68 billion.

Better pricing and customer service have helped Home Depot take market share from smaller rival Lowe’s Cos. The industry leader has also gained from tailoring its marketing to local areas, centralizing distribution centers and shifting more workers to jobs where they serve customers directly.

Sales at Home Depot stores open at least a year rose 4.3 percent, including a 4.8 percent increase in the United States. Many on Wall Street expect same-store sales from Lowe’s to be weaker than those from Home Depot for the 16th straight quarter when the smaller chain reports results on Wednesday.

Under Blake, Home Depot was also quicker than Lowe’s to cut costs in the years after the housing collapse.

Net income in the first quarter rose to $1.2 billion, or 83 cents a share, from $1 billion, or 68 cents a share, a year earlier. Analysts on average had forecast a profit of 77 cents a share, according to Thomson Reuters I/B/E/S.

For the year, the company now expects earnings of $3.52 a share, up from its prior outlook of $3.37. It forecast a sales increase of about 2.8 percent, up from previous expectations of a 2 percent rise.

Home Depot profit beats as housing market improves

ATLANTA, Tue Nov 13, 2012 – Home Depot Inc. reported a higher-than-expected quarterly profit on Tuesday and raised its full-year outlook as the world’s largest home improvement chain benefited from a recent uptick in the U.S. housing market.

The nascent recovery in housing has encouraged professional contractors to buy more in recent months. Home Depot has also gained from its own efforts to improve distribution, cut costs and localize marketing and merchandising.

Shares of Home Depot were up 2 percent at $62.40 in trading before the market opened.

“Our third-quarter results were better than we expected and reflected, in part, what we believe is the start of the path toward the healing of the housing market,” said Home Depot CEO Frank Blake.

Net earnings rose to $947 million, or 63 cents per share, in the third quarter ended on Oct. 28 from $934 million, or 60 cents per share, a year earlier.

Lowe’s misses estimates, lags Home Depot

MOORESVILLE, N.C., Mon Aug 20, – Lowe’s Cos. Inc. reported weaker-than-expected quarterly results and cut its profit outlook for the fiscal year as the world’s second-largest home improvement chain lost market share to larger rival Home Depot Inc.

Lowe’s shares fell more than 8 percent in premarket trading.

The lackluster results came just days after Home Depot beat Wall Street’s quarterly profit estimates with the help of cost controls and market share gains, and raised its earnings outlook for the year.

Lowe’s recently decided to offer fewer discounts on expensive items like appliances, in sync with its bigger plan to offer “everyday low prices” rather than promotions. The move has driven some shoppers away.

Sales suffered in the traditionally strong second quarter, which ended on August 3, as unseasonably warm weather early in the year pulled some demand into the first quarter.

Sales at Lowe’s stores open at least a year fell 0.4 percent, including a 0.2 percent decrease for the U.S. business, marking the 13th straight quarter that the company trailed Home Depot Inc in same-store sales.

“Lowe’s inability to drive sales despite discounting remains a concern,” Janney analyst David Strasser said in a research note.

Net earnings fell to $747 million or 64 cents a share, from $830 million, or 64 cents a share, a year earlier.

Analysts on average had expected a profit of 70 cents a share, according to Thomson Reuters I/B/E/S.

Sales fell 2 percent to $14.25 billion, while analysts had expected $14.46 billion.

Lowe’s, which has stores in the United States, Canada and Mexico, now expects flat total sales for the fiscal year ending on February 1. It forecast earnings of $1.64 a share for the period, compared with an outlook of $1.73 to $1.83 that it gave in May.

Lowe’s shares were down 8.1 percent at $25.60 in trading before the market opened.

Home Depot profit tops estimates; outlook raised

ATLANTA, Tue Aug 14, 2012 – Home Depot Inc. raised its fiscal-year earnings outlook on Tuesday as tight cost controls helped the world’s largest home improvement chain to offset sales weakness and beat Wall Street’s profit estimates in the latest quarter.

The company’s second quarter, which ended on July 29, is typically the most important selling period for home improvement chains, but unseasonably warm weather early in the year pulled some demand into the first quarter.

Net earnings rose to $1.53 billion, or $1.01 a share, in the quarter from $1.36 billion, or 86 cents a share, a year earlier.

Analysts on average were expecting a profit of 97 cents a share, according to Thomson Reuters I/B/E/S.

Sales rose 1.7 percent to $20.57 billion, but missed the analysts’ average estimate of $20.74 billion. Operating expenses fell 2.7 percent to $4.46 billion.

Shares of Home Depot rose 1.3 percent to $53.50 in trading before the market opened.

Home Depot has benefited from its recent efforts to improve distribution and customer service. It has been quicker to cut costs than rival Lowe’s Cos. Inc., and in some cases has gotten a boost as housing markets have rebounded in regions where it has a heavy presence.

Like Home Depot, Lowe’s gains from warm winter

MOORESVILLE, N.C. – Lowe’s Cos., the world’s second-largest home improvement chain, reported higher-than-expected quarterly sales as a warm winter prompted many homeowners to take up renovation projects that they normally save for the spring.

The results echoed those from larger rival Home Depot Inc., which also reported stellar sales due to strong demand for everything from paint to concrete in the unseasonably warm quarter.

Monday’s results boosted Lowe’s shares 2.7 percent to $27.90 and excited some industry watchers over the prospects of the home-improvement segment once the housing market recovers.

“We encourage investors to look past the near term and think about double-digit margins for all when housing recovers,” said Credit Suisse analyst Gary Balter, who has an “outperform” rating on both chains.

Lowe’s is also benefiting from a host of initiatives to win shoppers, including a recent move to shift away from promotions to more every-day low prices.

The retailer has also started offering more localized products, improved its website and tried to enhance the in-store experience by using better signage and technology in stores.

“This also shows a company making progress in its transition,” said Janney Capital Markets analyst David Strasser, who has a “buy” rating on the stock.

The company’s sales rose 11 percent to $11.63 billion in the fourth quarter that ended on February 3, well ahead of the analysts’ average estimate of $11.34 billion, according to Thomson Reuters I/B/E/S. Sales at stores open at least a year rose 3.4 percent.

Net income rose to $322 million, or 26 cents a share, from $285 million, or 21 cents a share, a year earlier.

Excluding items, the profit was 24 cents a share, in line with the analysts’ average estimate, according to Thomson Reuters I/B/E/S.

For the current fiscal year, Lowe’s forecast earnings of $1.75 to $1.85 a share.

Home Depot outshines Lowe’s again; raises its fiscal outlook

ATLANTA ― Home Depot Inc. raised its fiscal-year outlook for the third time in six months as a host of efforts to improve distribution and boost customer service helped the No. 1 home improvement chain gain share from archrival Lowe’s Cos. Inc.

Home Depot, which reported stronger-than-expected quarterly results on Tuesday, also raised its quarterly dividend by 16 percent to 29 cents per share.

The news boosted its shares 1.3 percent and came the day after Lowe’s also beat quarterly profit estimates and laid out a blueprint to win back shoppers from its larger competitor.

Home Depot is benefiting from opening more centralized distribution centers, better merchandising tools, efforts to redirect labor to more customer-facing tasks and the use of more technology in stores.

The company has also been quicker to curb store growth and cut costs than Lowe’s, and in some cases has benefited as housing markets have improved in regions where it has a heavy presence.

“Overall, they are just out-executing Lowe’s at this point,” RBC Capital Markets Scot Ciccarelli said. “Lowe’s is trying to copy a lot of these same efforts that I think has helped Home Depot, but it is going to take a while for them to benefit from some of the changes that they are currently making.”

Home Depot’s sales at stores open at least a year rose 4.2 percent globally, including a 3.8 percent rise in the United States. This was the 10th consecutive quarter that the company has outshone Lowe’s, whose same-store sales rose 0.7 percent in the quarter.

Net income rose to $934 million, or 60 cents a share in the third quarter ended on October 30, from $834 million, or 51 cents a share, a year earlier.

Analysts on average were expecting a profit of 58 cents a share, according to Thomson Reuters I/B/E/S.

Sales rose 4.4 percent to $17.33 billion, beating the analysts’ average estimate of $17.12 billion.

For the current fiscal year, Home Depot sees earnings of $2.38 a share, up from its prior outlook of $2.34. It continues to expect sales to rise 2.5 percent in the period.

The dividend is payable on Dec. 15 to shareholders of record on the close of business on Dec. 1.

Home Depot raises outlook; eclipses competitor Lowe’s

NEW YORK ―  Home Depot Inc., the world’s largest home improvement chain, raised its fiscal-year profit forecast for the second time in three months on Tuesday as timely promotions and renewed focus on cheaper products helped it gain market share from rival Lowe’s Cos Inc.

The news boosted Home Depot’s shares by 2.3 percent to $32.20 and hurt Lowe’s shares by 1.6 percent to $19.36 in premarket trading.

Home Depot has been quicker to cut costs than Lowe’s, and in some cases has benefited as housing markets have improved in regions where it has a heavy presence.

Lowe’s reported weaker-than-expected quarterly sales on Monday and cut its fiscal-year outlook for the second time in three months.

Home Depot said it still expects fiscal-year sales to rise 2.5 percent. It forecast earnings of $2.34 a share excluding future stock repurchases, up from a prior forecast of $2.24.

“They are operating at a high level, taking chances where appropriate in merchandising, leveraging technology investments, and benefiting from a return to more localized marketing and merchandising in the store,” said analyst David Strasser of Janney Capital Markets.

In the second quarter, Home Depot’s same-store sales, or sales at stores open at least a year, rose 4.3 percent globally, including a 3.5 percent rise in U.S. same-store sales, making it the ninth consecutive quarter that it has outshone its smaller rival. Lowe’s same-store sales fell 0.3 percent in the quarter.

Strasser said the 4.3 percent same-store sales rise was better than his 2.5 percent estimate. Promotional programs, including a U.S. Independence Day appliance event and a late July event on storage products, helped win shoppers, he added.

“Home Depot comps are now running well ahead of GDP growth,” Credit Suisse analyst Gary Balter said, adding that the chain’s back half outlook implies that sales trends will modestly strengthen.

Balter said Home Depot’s stock is undervalued and it is set up for significantly stronger earnings when the housing sector stabilizes.

U.S. homebuilder sentiment remained stuck near historic lows this month, even as consumer sentiment in the world’s largest economy worsened sharply in early August, falling to the lowest level in more than three decades. U.S. economic growth was anemic in the first half of the year.