ATLANTA – The Home Depot Inc. (HD), the nation's largest home improvement store chain, reported a nearly 15 percent jump in third-quarter earnings on strong sales, particularly at stores open at least a year.
The results, announced before the market opened Tuesday, beat Wall Street expectations and prompted the Atlanta-based company to raise its full-year earnings estimates.
For the three months ending Oct. 31, Home Depot said it earned $1.32 billion, or 60 cents a share, compared to a profit of $1.15 billion, or 50 cents a share, a year ago. Analysts surveyed by Thomson First Call were expecting earnings of 57 cents a share.
Revenue in the quarter rose 13.1 percent to $18.77 billion from $16.60 billion recorded in the same three-month period a year ago.
Same-store sales — a measure that compares sales at stores open at least a year — increased 4.5 percent in the quarter.
Based on the results, Home Depot said it was raising its fiscal 2004 earnings per share growth guidance to 19 percent to 20 percent. It had earlier expected earnings per share growth for the year of 14 percent to 17 percent.
The company said it has benefited from the continued improvements it has made to the look of its stores, from enhanced lighting and new merchandise to cleaner floors and more helpful personnel. The chain launched a broad store modernization program in the face of growing competition.
"The strength of our core retail business, coupled with our growing services and professional supply businesses, is delivering solid returns," said chairman and chief executive Bob Nardelli (search).
"Our business strategy of enhancing the core, extending the business and expanding our markets is clearly driving consistent, profitable sales growth. Additionally, in the face of a record number of hurricanes in the Southeast, our stores remained open and our associates and suppliers worked tirelessly to take care of our customers, and I want to thank them."
For the first nine months of the year, Home Depot earned $3.96 billion, or $1.78 a share, compared to a profit of $3.35 billion, or $1.46 a share, a year ago. Home Depot said the effect of an accounting change resulted in a reduction of net earnings of $108 million, or 5 cents a share, in the first nine months of the year. Nine-month revenue was $56.28 billion, compared to $49.69 billion a year ago.
Home Depot operates 1,826 stores in the United States, Canada and Mexico. Earlier this year, it said it plans to open stores in China, but did not say when or how many.
On Monday, the chain's chief rival, Lowe's Cos. (LOW), said its earnings rose 15.5 percent in the third quarter on a 16.2 percent increase in sales. Mooresville, N.C.-based Lowe's said it earned $522 million, or 66 cents a share, in the quarter, beating Wall Street's expectations by a penny a share.