Home Depot's second-quarter results in line, ups outlook

The home improvement retailer posted a profit of $2.44bn or $1.97 a share, up from $2.23bn or $1.73 a share the year before. Meanwhile, revenue rose 6.6% to $26.47bn.

Comparable store sales for the quarter were up 4.7%, while comparable sales for US stores were 5.4% higher.

Chief executive officer, chairman and president Craig Menear said: “We had a solid quarter, achieving the highest quarterly sales and net earnings results in company history as housing continues to be a tailwind for our business.

“This was made possible by our hard working associates in their continued dedication to our customers.”

Home Depot reaffirmed its fiscal 2016 sales guidance and said sales are expected to rise about 6.3%, with comparable sales gaining 4.9%. In addition, the company lifted its diluted earnings per share guidance for year. It now expects growth of around 15.6% from 2015 to $6.31.

RBC Capital Markets said the results were “very solid despite a difficult broader retail landscape and what seemed to be a relatively slow start to the quarter”.

“Despite some investor angst going into today’s print due to a relatively slow start to the quarter and some channel comments regarding higher-than-average promotional spending in the industry, we believe that Home Depot posted another very solid quarter.”

The Canadian bank said comparable sales for US stores were at the upper end of its expectations of around 5% to 5.5%, while comparable store sales for the quarter were roughly at the mid-point of investor expectations of 4.5% to 5%.