Home Depot Inc. (HD) reported a 4.4% increase in sales to $24.9 billion for the first quarter of 2018 compared to the prior-year period. Comparable sales were positive 4.2%, and US comparable sales were positive 3.9%. The company posted strong results in all markets and categories outside the seasonal business.
Net earnings were $2.4 billion or $2.08 per diluted share compared with $2 billion or $1.67 per diluted share in the prior year period.
The company beat market estimates on earnings numbers but missed out on revenue. Home Depot’s stock dropped more than 2% in premarket trading.
During the quarter, Home Depot saw a 1.3% decline in customer transactions while average ticket increased 5.8%. Sales per square foot saw an improvement of 4.5% from the same period last year.
Favorable trends in the housing market and on the economic landscape act as tailwinds for the company. In the retail industry, home improvement is performing well.
Home Depot has started seeing robust business with contractors, and this has helped it perform better than some of its peers like Lowe’s Companies Inc. (LOW) and Bed, Bath and Beyond (BBBY). Home Depot has also been working on its e-commerce plans and appears to be strong enough to withstand the Amazon effect.
Home Depot expects sales for fiscal 2018 to grow by about 6.7% and comp sales to be up around 5%. The company expects diluted earnings to improve by about 28% from fiscal 2017 to $9.31 per share.