Home Depot Posts Strong Sales, But Warns on Dollar

By Michael Calia And Chelsey Dulaney 

Home Depot Inc. posted better-than-expected results in its latest quarter on a surge in U.S. sales, though the home-improvement retailer gave a cautious outlook for the year, citing the strong U.S. dollar.

Home Depot also announced that it has boosted its quarterly dividend by 26% and authorized an $18 billion share repurchase program to replace its prior authorization.

For 2015, Home Depot said it expects to post per-share earnings of $5.11 to $5.17 on sales growth of 3.5% to 4.7%. At current rates, the company estimated that foreign exchange rates would bring down its 2015 sales growth by $1 billion and its per-share earnings by 6 cents.

Analysts polled by Thomson Reuters had recently projected per-share earnings of $5.23 on sales growth of 5%.

Under Craig Menear, who became chief executive last year, Home Depot has sought to improve on recent steady sales growth. The company, like its smaller rival Lowe's Cos., has been one of the main retail beneficiaries of the improving U.S. housing market as consumers pursue renovations and other projects. Earlier this month, the company said it would hire 80,000 workers for the spring and summer season this year, matching last year's level.

Home Depot has also 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.

Home Depot said Tuesday that it couldn't yet estimate costs of the breach.

For the quarter ended Feb. 1, Home Depot posted same-store sales growth of 7.9%, excluding newly opened or closed stores. U.S. stores posted 8.9% growth, while total customer transactions rose 5.1%. Average ticket rose 3% to $57.79.

Overall, the company reported earnings of $1.38 billion, or $1.05 a share, up from $1.01 billion, or 73 cents a share, a year earlier. The quarter's results included a $111 million gain on the sale of a portion of the company's ownership in HD Supply Holdings Inc.

Excluding the gain, per-share earnings were $1.

Net sales increased 8.3% to $19.16 billion.

Analysts had expected earnings of 89 cents a share and revenue of $18.7 billion.

Write to Michael Calia at [e-mail] and Chelsey Dulaney at [e-mail]

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