Home Depot shares jump as profit, sales up in Q3
Home Depot (HD) posted net income of $1.7 billion in the third quarter, up 12.2% compared to the same period a year earlier, as the housing market fueled a strong performance.
The home-improvement retailer also enjoyed a 6.4% increase in sales to $21.9 billion for the quarter, edging investor expectations.
Sales at stores open at least a year — a figure typically used to gauge the health of operations — rose 5.1%.
Diluted earnings per share rose 17.4% to $1.35. Investors had expected $1.32, according to S&P Capital IQ.
“During the quarter, we saw broad-based growth across our geographies and product categories, led by growth in transactions from both our DIY and pro customers,” Home Depot CEO Craig Menear said in a statement.
Shares jumped 3.1% to $124.56 in early trading.
The strong U.S. housing market is bolstering Home Depot.
The average purchase at all Home Depot stores globally rose only 0.8% in the third quarter, compared to the same period a year earlier.
But the average purchase in U.S. stores jumped 2.6%, Menear told investors on a conference call. That means the company benefited from higher foot traffic and higher spending in the U.S.
The company is investing heavily in online ordering, which now accounts for about 5% of its sales. The retailer opened its third direct fulfillment center in the U.S. last quarter, meaning 90% of U.S. customers can now receive Home Depot shipments in two business days or less.
The new facility, located in Troy Township, Ohio, is 1.6 million square feet and will eventually employ about 500 workers.
Menear said 42% of online orders are picked up at Home Depot stores.
One negative factor for the company is the strong U.S. dollar, which has reduced sales by about $1 billion so far in 2015.
Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.