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Home Depot Quarterly Profit Up 53 Percent

By Reuters
Published | Updated

ATLANTA – Home Depot Inc. reported Tuesday a 53 increase in fiscal fourth-quarter profit as a strong U.S. housing market and mild weather led many consumers to improve their homes.

The world's largest home-improvement retailer also said it expected to meet analysts' current consensus estimates for fiscal first-quarter profit.

For the quarter ended Feb 3, Home Depot earned $710 million, or 30 cents a diluted share, compared with $465 million, or 20 cents a share, a year earlier.

Results topped analysts' consensus estimate of 28 cents, according to research firm Thomson Financial/First Call.

Sales rose 29 percent to $13.5 billion. Same-store sales, or those at stores open at least a year -- an important retail barometer -- rose 5 percent, compared with flat sales a year earlier.

"Overall, it looks like a pretty good quarter," said Steve Baumgarten of Parker/Hunter, who said that both profit and same-store sales came in above expectations.

In a statement, Home Depot Chairman and Chief Executive Robert Nardelli said warm November weather and store discounts spurred sales.

"We were particularly pleased with the response to our company-wide January clearance event that drove sales while positioning our stores for new, exciting merchandise in the spring," Nardelli said.

The 2001 fourth quarter contained 14 weeks compared to 13 weeks for the prior year. The 14th week added approximately $880 million in sales and increased per-share earnings by about three cents for the quarter and year, Home Depot said.

Home Depot said it expected to meet consensus estimates of 32 cents for the first quarter of fiscal 2002. In the 2001 fiscal first quarter, Home Depot earned 27 cents.

Both Home Depot and Lowe's Cos. , its main rival, were expected to post strong fourth-quarter results and are seen performing well for most of this year on a strong U.S. housing market.

Last year's rate cuts by the Federal Reserve resulted in lower mortgage rates, spurring home purchases and refinancings. On Monday, the U.S. reported that sales of existing homes soared a record 16.2 percent in January.

Home Depot and Lowe's benefit as home buyers take on remodeling and other home-improvement projects.

Lowe's on Monday reported a 55 percent rise in profit and said results for fiscal 2002 would top analysts' consensus estimates.