Home Depot Inc. (HD), the largest U.S. home-improvement retailer, reported second-quarter profit that topped analysts’ estimates and raised its forecast for profit this year as customers spent more on remodeling projects.
Net income increased 12 percent to $1.53 billion, or $1.01 a share, from $1.36 billion, or 86 cents, a year earlier, the Atlanta-based company said today in a statement. Analysts projected 97 cents, the average of 25 estimates in a Bloomberg survey.
Chief Executive Officer Frank Blake has reduced costs since the housing crisis and shifted spending to new technology, including handheld devices for employees to help customers find merchandise and ring up purchases. Sales by stores open at least a year rose 2.1 percent, the fifth straight quarterly increase, as consumers visited more often and spent more per trip.
“It was a quarter of strong execution,” John Tomlinson, an analyst at ITG Investment Research in New York, said today by telephone. His firm doesn’t rate shares. “They did a great job on cost savings.”
Operating expenses declined 2.7 percent to $4.46 billion. Revenue advanced 1.7 percent to $20.6 billion, trailing analysts’ projection of $20.7 billion as warm weather pulled sales into the previous quarter. Comparable-store sales trailed the 2.6 percent average estimate of analysts surveyed by Swampscott, Massachusetts-based researcher Retail Metrics.
Home Depot rose 3.6 percent to $54.71 at the close in New York. The shares have climbed 30 percent this year.
The number of purchases increased 0.6 percent to 374.9 million, and the average transaction value rose 1.8 percent to $55.02, Home Depot said.
Profit this year will be about $2.95 a share, the company said today. That’s up from a previous forecast of $2.90 and tops analysts’ $2.92 average estimate.
Home Depot is benefiting from signs of life in the U.S. housing market. Single-family housing starts have accelerated in four straight months for the first time since 2010.
The rebound still is being tested by weak job gains, a backlog of foreclosures and tight mortgage lending. The rate of new-home sales slowed in June by more than 8 percent from the previous month, the largest decline since February 2011.
Lowe’s Cos. (LOW), the second-biggest home improvement retailer, plans to report second-quarter results Aug. 20.
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