Home Depot Inc (NYSE:HD) shares rose after reporting better profit margins for the first quarter. The spring season for retailer is considered as the most retailing season of the year. The company also boosted its full year profit guidance.
The firm gained profit of $1.16 a share, excluding a 5-cent-a-share profit gained from the tax-audit settlement, in the three months ended May 3 bested analysts’ forecast of $1.15.
The home improvement retailer sales was aided by the continued increase in U.S. home prices and the arrival of spring season, after the long term winter season which hurt the U.S residential homes, so arrival of new season urged the residents to work on home exteriors. The spring marks the biggest revenue producer for the Home Depot even more than Holiday shopping season.
“We had a stronger-than-expected start to the year as we experienced a more normal spring across much of the country and continued recovery of the U.S. housing market,” Chief Executive Officer Craig Menear said in the statement.
The home sales grew 20 percent in April, making it the highest sales growth in more than seven years, according to latest reports of Commerce Department released on Tuesday.
The company expects profit to be in range of $5.24 to $5.27 a share, including audit benefit, for the current year, up from its earlier profit outlook of $5.17. The lower end of the projection depends on the current U.S dollar rates.
The higher forecast is “encouraging,” even after backing out the tax item, Kate McShane, an analyst at Citigroup Inc., said in a note.
“Home Depot reported another strong quarter, at a time that retailers across the board are struggling to drive sales,” David Strasser, an analyst for Janney Montgomery Scott, said in a research note.
The world’s largest home-improvement chain gross income boosted 15 percent to $1.58 billion, or $1.21 a share, compared to $1.38 billion, or $1 in a year earlier period.
