NEW YORK –
Home Depot reported higher net earnings and sales while rival home-improvement chain Lowe’s reported lackluster results in their fiscal second quarters.
The Home Depot
reported a 14.3 percent increase in net earnings, to $1.4 billion, for its second fiscal quarter, ended July 31.
Net sales rose 4.2 percent to $20.2 billion year over year, and U.S. comp-store sales were up 3.5 percent.
The No. 1 home-improvement chain attributed the strong results to a rebound in its seasonal business, storm-related repairs, and strength in its core product categories.
Average ticket was up 3.3 percent to $54.04, and the number of customer transactions edged up 1.1 percent to 373 million.
“We continue to deliver a strong operating performance while also investing in customer service and our merchandising initiatives,” said chairman/CEO Frank Blake, who also credited “the hard work and dedication” of the company’s sales associates for the strong showing.
In a research note, Credit Suisse retail analyst Gary Balter noted that Home Depot is widening the compsales and performance gap with No. 2 home-improvement chain Lowe’s. Balter said Home Depot’s U.S. comps, higher gross margin and significantly better expense leverage all contributed to the outperformance.
reported flat net earnings of $830 million for its fiscal second quarter, ended July 29. Sales edged up 1.3 percent to $14.5 billion, well below the company’s 4 percent forecast, and same-store sales slipped 0.3 percent, reflecting continued macroeconomic weakness.
“Despite some recovery in our seasonal business, our performance for the quarter fell short of our expectations,” acknowledged Lowe’s chairman/president/ CEO Robert Niblock. “We are working diligently to improve sales and profitability in the nearterm in a way that we believe will generate sustained customer preference and shareholder value. We are also building momentum in 2011 behind our longer-term commitment to deliver even better customer experiences.”
The earnings results included a charge for evaluating the carrying value of long-lived assets, including seven stores that closed on Aug. 14, which reduced pretax earnings for the quarter by $83 million.
During the quarter Lowe’s opened two stores, bringing the store count to 1,753 locations in the U.S., Canada and Mexico as of July 29, for a total of 197.6 million square feet of retail selling space, up 1.5 percent over last year.