(Bloomberg)—Home Depot Inc. dodged the woes of the struggling U.S. retail industry, helped by Americans plowing more money into fixing up their houses.
In its fiscal first quarter ended April 30, online sales surged 23% at Home Depot, No. 7 in the Internet Retailer 2017 Top 500. The home improvement retailer reported that roofing, flooring and appliances were the best-performing divisions—each growing more than 10%—in a sign that homeowners are taking on big projects. That helped purchases above $900 gain 16%. The company’s sales to contractors and builders grew twice as fast as those to do-it-yourself customers.
Total revenue rose 4.9% to $23.9 billion in the first quarter, surpassing analysts’ $23.7 billion prediction.
Sales at stores open for more than a year, a key benchmark for investors, rose 5.5%. That beat analysts’ 3.9% prediction, according to Consensus Metrix. In the U.S., revenue by this measure rose 6%.
Home Depot, the largest U.S. home-improvement retailer, is profiting from the rebound in housing prices, which has made property owners more willing to revamp their properties because they see them as a sound investment. That’s helped Home Depot avoid a broader retail malaise, in which falling mall traffic and online shopping has weighed on the industry’s results.
While forecasts for U.S. gross domestic product are mixed, “housing continues to be a growing asset class and our sales thus far in May have been very good,” chief financial officer Carol Tome said on a call with analysts.
Profit rose to $1.67 a share in the period that ended April 30, the company said Tuesday. Analysts projected $1.61, on average. Home Depot also increased its full-year earnings outlook by 2 cents a share.
Home Depot shares rose as high as $160.86 on Tuesday, the biggest intraday advance in more than five months. They had already gained 17% this year through Monday’s close.
The Atlanta-based company raised its full-year outlook for earnings per share by two cents to $7.15 and reaffirmed its guidance for sales growth of about 4.6%.
The rosy results followed a raft of disappointing earnings from department-store chains last week. Macy’s Inc. (No. 6), the leader of that industry, suffered its worst stock decline since the recession after posting lower sales than Wall Street predicted. Kohl’s Corp. (No. 18), J.C. Penney Co. (No. 33), Nordstrom Inc. (No. 17) and Dillard’s Inc. (No. 145) also disappointed investors.
For fiscal Q1 ended April, Home Depot reported:
- Total sales of $23.887 billion, a 4.9% increase compared with $22.762 billion in Q1 of the prior year.
- Net earnings of $2.01 billion, up 11.7% from $1.80 billion.