Home Depot earnings rise despite data breach
Home Depot (HD) Tuesday reported an increase in profit and revenue in the third quarter that beat Wall Street estimates.
The home improvement retailer saw sales growth over the quarter despite a massive data breach in September and affirmed its guidance for the year of 4.8% sales growth in 2014.
Home Depot listed $28 million in pretax net expenses related to the company's data breach, with a total for the fiscal year expected to be $34 million. The retailer had a $100 million insurance policy to protect against breach expenses.
The ongoing expenses include legal fees, credit monitoring and IT costs. "We will continue to invest in enhanced security measures to protect our customers' information," said CEO Craig Menear in a conference call with analysts.
"It's very difficult for us to be able to determine if there was any impact" that the breach had on sales, he said.
Home Depot had 355 million transactions in the three months -- July, August and September -- compared to 344 million in 2013, and average spending rose 2.3% to $57.55. "I think that represents a strength for our customers' confidence in the Home Depot and we appreciate that," Menear said.
Home Depot reported net income rose 14% to $1.5 billion in the third quarter, or $1.15 a share. That compares with $1.4 billion, or 95 cents a share, in the same period a year ago.
Revenue rose 5.4% to $20.52 from a year ago.
Wall Street analysts were expecting earnings of $1.13 a share and revenue of $20.46 billion, according to FactSet.
"During the quarter we saw strong performance across all geographies led by growth in transactions and continued strength in the core of the store," Menear said.
Sales at stores open at least a year, a key retail metric, rose 5.2% and same-store sales in the U.S. were up 5.8%.
Shares of Home Depot were down more than 2% to $96.00 at midday.