Home Depot received the benefits of warm early start to summer following a tumultuous spring, and Tuesday posted sales and earnings for the second quarter that easily surpassed expectations of analysts.
The home improvement giant also increased its outlook for same-store sales and revenue for its full year, as the customer transactions increased during the most recent quarter and shoppers were spending more at its stores overall.
Shares of Home Depot moved higher by 2.5% in trading before the opening bell.
Earnings per share reached $3.05 while analysts were expecting $2.84. Revenue came in at $30.45 billion while analysts were expecting $30.02 billion. Sales at same-store were up 8% worldwide, while 6.6% was expected by analysts.
A cooler beginning to spring this year caused many homeowners to delay gardening, repair projects and remodeling in the U.S.
Sales for a per-square-foot basis were up 8.6% during the most recent quarter for Home Depot. The average ticket per shopper increased by 5% to $66.20, while customer transactions overall were up 3.1%.
Sales at Home Depot accelerated more thanks to the U.S. housing market and the favorable economic tailwinds. Spending by consumers on items used in home improvement has not fluctuated much when compared to apparel, in part due to homeowners having been in a mode of recovery due to the severe weather the last year.
The retailer is focusing on growing the Pro business it has and believes that by making its delivery platform stronger it will take a bigger share of the market for professional homebuilders.
The company announced earlier in 2018 that it is planning to spend more than $1.2 billion during the next five years as a way to bulk up on its supply chain, with a goal of getting orders online to its shoppers much quicker.
Net income during the second quarter of its fiscal 2018 that ended on July 29 reached $3.5 billion equal to $3.05 a share, compared to last year’s $2.7 billion equal to $2.25 per share. Excluding one-off items, Home Depot per share earnings were $3.05, which easily beat the expected $2.84.
Revenue was up 8.4% to end the quarter compared to figures from the same period one year ago.
Home Depot is expecting revenue to grow 7% for the full year in comparison to a prior outlook of 6.5% growth. Sales are same stores are expected to increase 5.3% for its fiscal 2018 full year, from its previous estimate of 5%.