Home Depot eclipses Street's Q1 view
By CBS MarketWatch
Last Update: 9:38 AM ET May 18, 2004
NEW YORK (CBS.MW) -- Home Depot's shares rallied 3 percent in early dealings Tuesday, after the home-improvement retailing giant trounced Wall Street expectations for its first-quarter results and lifted its outlook for fiscal 2004.
Atlanta-based Home Depot (HD: news, chart, profile), a Dow Jones Industrial Average component, reported a profit of $1.1 billion, or 49 cents per share, for the three months ended May 2. In the same period a year earlier, the company earned $907 million, or 39 cents per share.
Sales jumped 16 percent for the quarter to $17.6 billion from $15.2 billion last year. Same-store sales increased 7.7 percent in the quarter -- the best performance for the company in five years.
The average estimate of analysts polled by Thomson First Call was for a profit of 43 cents per share in the May quarter. Sales were projected at $17.2 billion for the period, with analyst estimates ranging from $17.5 billion to $16.8 billion.
Shares of Home Depot reached $34.46, up 99 cents, in the first few minutes of trading on the New York Stock Exchange.
"Our performance in the first quarter is the best illustration yet of how we executed our strategy to drive growth," said Bob Nardelli, Home Depot's chairman, president and CEO, in a statement.
He continued: "We continue to build on the momentum created in 2003 by staying focused on our strategy to enhance our stores, extend our business and expand our markets."
The first-quarter results got a lift from a 7.4 percent increase in the average ticket for customers to $55.11, and from 3.9 percent sequential improvement in sales per square foot to $376.80. While the ticket increases came from every product category, the company noted that its appliance business delivered a strong double-digit same-store sales performance.
Looking ahead, Home Depot raised its 2004 sales growth outlook to between 10 and 12 percent. And management raised its earnings-per-share growth forecast for the year to a range from 10 to 14 percent from 7 to 11 percent previously.
Excluding the impact of the EITF 02-16 accounting standard, the company sees earnings-per-share growth of 13 to 16 percent for fiscal 2004.
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