While many retail establishments saw their earnings blown down by the double punch of hurricanes Harvey and Irma, home improvement supplies company Home Depot was actually bolstered by them.
Revenue from Hurricane Harvey and Hurricane Irma added an additionally reported $282 million to Home Depot’s sales total for the third quarter, according to CNBC reports and the company’s latest earnings release on Tuesday (Nov. 14).
On the back of that better-than-expected Q3 performance, it has raised its full-year outlook based, in part, on ongoing “hurricane recovery sales.”
By the numbers, Home Depot stocks came in at $1.84 per share, ahead of analysts estimates of $1.82. That brought net income to $2.17 billion in the fiscal third quarter compared with $1.97 billion, or $1.60 per share, a year ago.
Revenue reached $25.03 billion versus an estimate of $24.55 billion, and the much-watched and worried-over same-store sales metric also came in above forecasts, up 7.9 percent instead of the expected 5.8 percent.
“Though this quarter was marked by an unprecedented number of natural disasters, including multiple hurricanes, wildfires in the West and earthquakes in Mexico, the underlying health of our core business remains solid,” said Craig Menear, Home Depot CEO, in a statement.
The retailer’s sales per square foot also grew nearly 8 percent year-over-year, shoppers’ average tickets were 5 percent higher and customer transactions increased by 2.5 percent.
For the remainder of the year, Home Depot is now forecasting a total sales increase of 6.3 percent, up from a projected 5.3 percent. Comparable sales are now predicted to climb 6.5 percent versus prior estimates of 5.5 percent.
“Home Depot’s recent comparable store sales performance and improved sales and earnings guidance is a good indicator that the home improvement sector continues to paint a better outlook as it sidesteps broader retail woes,” said Bill Fahy, investor research firm Moody’s vice president. “Home improvement has remained a retail bright spot even as a myriad of headaches continue to afflict the broader retail industry.”
The home improvement supplies retailer also noted it may be the beneficiary of an improved economy, as it saw stronger sales for expensive items including appliances, vinyl flooring and carpet. Big-ticket sales, including transactions exceeding $900, were up 12 percent.
“Favorable economic tailwinds, especially from the housing market, look set to continue in 2018,” said digital media company GlobalData’s retail managing director, Neil Saunders. “Home Depot has created a proposition that ensures it is the go-to destination online and is successfully defending its business from the rise of Amazon and other internet players.”