Home Depot Boosts Guidance on Strong Same-Store Sales

Home Depot Inc. on Tuesday continued to buck larger retail trends in reporting earnings well above expectations on strong sales in a more favorable economy.

Shares, which have risen 12% over the past three months, added 1.2% premarket to $137.

For 2016, the company now expects earnings of $6.27 a share on revenue growth of 6.3%, up from its previous guidance for earnings of $6.12 to $6.18 a share on revenue growth of 5.1% to 6%. Same-store sales are anticipated to grow about 4.9%.

The Atlanta-based company has continued to report rising sales, setting it apart from other major retailers booking softer sales as consumers dial back spending. Home Depot and Lowe's Cos. have largely been insulated amid an improving housing market and Americans' willingness to spend on home-improvement projects. And with people moving more now thanks to appreciating home values and low mortgage rates, they are also spending more to refurbish dwellings.

During the most recent quarter, sales at Home Depot stores open at least a year grew 6.5%.

"We were pleased with our stronger than expected start to the year, driven by solid execution and broad-based growth across the store," said Chief Executive Craig Menear, adding the quarter was "marked by week-to-week demand spikes caused by weather variability."

In all for the first quarter, Home Depot reported a profit of $1.8 billion, or $1.44 a share, up from $1.58 billion, or $1.21, a year earlier. Revenue climbed 9% to $22.76 billion.

Analysts polled by Thomson Reuters had projected adjusted earnings of $1.36 a share on $22.39 billion in sales, according to Thomson Reuters.

Lowe's is slated to report results Wednesday.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

May 17, 2016 07:45 ET (11:45 GMT)

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