Home Depot beats sales and profit estimates on housing market strength

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(Reuters) – Home Depot Inc (N:) beat quarterly sales and profit estimates on Tuesday, boosted by a strong U.S. housing market and demand during the holiday season.

Shares of the home improvement chain, considered a barometer for the economic health of U.S. households, rose 2.6% to $245.91 in premarket trading.

The U.S. housing market has benefited from the lowest mortgage rates in more than three years after the Federal Reserve lowered borrowing costs thrice in 2019.

Sales of existing homes, which make up about 90% of U.S. home sales, surged 9.6% on a year-on-year basis in January, the National Association of Realtors said on Friday.

The sales, however, declined on a seasonally adjusted annual rate last month, due to a dearth of houses on the market, though the supply squeeze is likely to ease with building permits and under-construction houses at levels last seen nearly 13 years ago.

Same-store sales at Home Depot rose 5.2% in the fourth quarter ended Feb. 2, above expectations of a 4.8% increase, according to IBES data from Refinitiv. [nPn8lgrs9a]

Net sales fell 2.7% to $25.78 billion, but beat analysts’ average expectation of $25.76 billion.

Net earnings rose to $2.48 billion, or $2.28 per share, from $2.34 billion, or $2.09 per share a year earlier. Analysts were expecting earnings of $2.10 per share.

(Bangalore Newsroom)

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