Atlanta – 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 The Home Depot is widening
the comp-sales and performance gap with No. 2 home-improvement chain Lowe’s,
which yesterday reported
flat
profits and modest sales gains
for the second quarter. Balter said Home
Depot’s U.S. comps, higher gross margin and significantly better expense
leverage all contributed to the outperformance. While its international
business was much stronger than its domestic operations, the company also
delivered stronger than expected cash flow, helped by an increase in accounts
payable, he said.
Looking ahead, the
chain is projecting a 2.5 percent increase in fiscal 2011 sales and raised its
guidance on diluted earnings per share to $2.34, a 16 percent increase for the
year.
