A Home Depot store in Encinitas, Calif., on April 4, 2016.Mike Blake/Reuters
Home Depot Inc HD-N beat quarterly sales and profit estimates on Tuesday, buoyed by steady demand for its tools, paint and building materials during the holiday season.
The company’s shares rose 1.2 per cent premarket in a weak broader market, as the largest U.S. home improvement chain also boosted its quarterly dividend by 15 per cent.
Spending on do-it-yourself home projects – which surged at the height of the health crisis when people were stuck indoors – has so far held up better than feared even as restrictions ease and encourage a return to pre-pandemic lifestyles.
Home Depot’s sales have jumped more than $40-billion in the last two years, notching up more than $150-billion in annual sales for the first time ever in the year ended January 2022.
The company has been aggressively spending to minimize shortages due to global supply-chain disruptions, chartering a cargo ship to beat the pandemic-driven shipping delays.
Overall net sales rose 10.7 per cent to $35.72-billion in the fourth quarter, beating analysts’ average estimate of $34.87-billion, according to IBES data from Refinitiv.
Still, Home Depot’s full-year outlook was less detailed than its pre-pandemic forecasts. The company projected sales growth to be “slightly positive” and earnings-per-share-growth to be low single digits.
Analysts have warned of the difficulty in predicting what 2022 could be like for home improvement chains as rising mortgage rates and inflation threaten to hit housing demand and prices, potentially making customers less likely to invest in their homes.
Same-store sales at Home Depot rose 8.1 per cent in the fourth quarter, compared with analysts’ estimates of a 4.9 per cent increase.
The company earned $3.21 per share, while analysts had expected a profit of $3.18.
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