Home Depot Inc (NYSE:HD, XETRA:HDI) on Tuesday reported second-quarter sales and profit that topped Wall Street estimates, as demand for smaller home improvement projects helped drive comparable sales higher.
The home improvement retailer posted sales of $47.9 billion, up 5.7% from a year earlier and ahead of analyst estimates of $47.27 billion. Adjusted earnings came in at $4.92 per share, above the $4.73 expected and up 5.1% from the prior year.
Comparable sales rose 1.7%, well above the 0.7% analysts had forecast. In the US, comparable sales climbed 1.3%.
Net income reached $4.8 billion, a 4% increase from a year earlier.
According to Jefferies, comparable sales outperformed both Street and management expectations, with a 2.8% rise in average ticket size more than offsetting a 1% drop in customer traffic. The brokerage said continued demand in smaller project categories supported the results.
Home Depot affirmed its full-year guidance, projecting total sales growth of 2.5% to 4.5% and adjusted earnings growth ranging from flat to 4%. The company expects comparable sales growth of flat to 2% for the year.
Adjusted operating income for the quarter was $7 billion, up 4.8% year over year, though adjusted operating margin slipped 10 basis points to 14.7%.
Jefferies noted that investor attention on the earnings call is likely to focus on the extent to which IEPPA refunds can offset elevated raw material costs.
The company opened 15 new stores during the quarter.
Shares edged 0.7% higher Tuesday morning.
