Home Depot Builds Profit and Sees Improvements Ahead

By Chelsey Dulaney 

Home Depot Inc. on Tuesday boosted its profit and sales guidance for the year as the home-improvement retailer benefits from recovery in the housing market.

Home Depot is now expecting per-share earnings of $5.24 to $5.27, up from its February forecast for $5.11 to $5.17 in earnings. The company forecast sales growth of 4.2% to 4.8%, compared with its previous call for 3.5% to 4.7% growth.

Home Depot and peer Lowe's Cos. have been helped lately by the improving housing market and homeowners' need to renovate.

"We had a stronger than expected start to the year as we experienced a more normal spring across much of the country and continued recovery of the U.S. housing market," said Chief Executive Craig Menear in a news release.

For the quarter ended May 3, Home Depot posted same-store sales growth of 6.1%, excluding newly opened or closed stores.

U.S. stores posted 7.1% growth, while total customer transactions rose 4.6%. Average ticket rose 1.8% to $58.60.

Overall, the company reported earnings of $1.58 billion, or $1.21 a share, up from $1.38 billion, or $1 a share, a year earlier. Results were helped by a $71 million tax audit settlement.

Net sales grew 6.1% to $20.9 billion.

Analysts had expected earnings of $1.15 a share and revenue of $20.8 billion.

Home Depot also has had to contend with the aftermath of a widespread data breach last year. The company has said it faces several dozen civil suits in the issue in which millions of customers' credit-card information and emails were stolen. To combat future thefts, the company has completed a project to encrypt credit-card data at the point of sale.

The company's first quarter results included $7 million in breach-related costs, though Home Depot said it can't yet estimate the full scope of costs related to the breach.

Write to Chelsey Dulaney at [e-mail]

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