Home Depot Inc., the world’s largest home-improvement retailer, reported fourth-quarter profit that exceeded analysts’ estimates as warmer weather helped spur an increase in residential spending.
Net income in the quarter ended Jan. 29 increased 32 percent to $774 million, or 50 cents a share, from $587 million, or 36 cents, a year earlier, Atlanta-based Home Depot said Tuesday. Analysts projected 42 cents, the average of 24 estimates compiled by Bloomberg News.
Home Depot attracted customers who spent more as U.S. unemployment sank to a three-year low in January and builders began work on more houses. Warmer weather helped sales at stores open at least a year advance 5.7 percent, the biggest gain since a 7.7 percent increase in the first quarter of 2004. That topped the average estimate for a 3 percent gain by five analysts.
“It was a pretty fantastic quarter given the continued pressure on the U.S. consumer and the overall softness of the U.S. recovery,” said John Tomlinson, an analyst at ITG Investment Research in New York. “The warmer weather helped outdoor home renovation projects and allowed builders to get a head start on construction.”
The company projected full-year earnings of $2.79 a share, with stock buybacks. Analysts projected $2.77 a share. The retailer said it will repurchase about $3.5 billion in stock.
Revenue could increase by about 4 percent to $73.2 billion, compared with analysts’ estimate of $72.5 billion.
In the fourth quarter, the number of customer transactions rose 3.6 percent to 303 million, and shoppers spent $52.54 on average, an increase of 2.4 percent from a year earlier.
Revenue rose 5.9 percent to $16 billion. Analysts predicted $15.5 billion, the average of estimates compiled by Bloomberg News.
“With warmer weather, our business delivered results that exceeded our expectations,” Chairman and Chief Executive Officer Frank Blake said in the statement.
U.S. construction spending rose 1.5 percent in December, Commerce Department figures showed Feb. 1. That was more than the median analyst estimate of a 0.5 percent gain. The increase, which included a 0.8 percent gain in home-building outlays, was the biggest jump since August.
