FINANCE

Weather puts damper on Home Depot Q1 sales

BY Marianne Wilson

The Home Depot reported first-quarter earnings that beat analysts’ expectations even as its same-store sales slowed amid unfavorable weather and falling lumber prices.

Net earnings for the quarter ended May 5 increased 4.5% to $2.51 billion, or $2.27 a share, from $2.4 billion, or $2.08 a diluted share, in the year-ago period. Analysts had forecast earnings of $2.18 a share.

Sales rose 5.7% to $26.4 billion, just ahead of Street expectations. Same-store U.S. sales rose 3.0%. Total comps rose 2.5%, which was the lowest since the second quarter of 2012.

Customer transactions were up 3.8% during the quarter. The average ticket increased 2%.

“We were pleased with the underlying performance of the core business despite unfavorable weather in February and significant deflation in lumber prices compared to a year ago,” said CEO Craig Menear. “Looking ahead, we remain excited about the momentum we are seeing with our strategic investments. As a result of these initiatives, and the current macroeconomic and housing backdrop, today we are reaffirming our sales and earnings guidance for fiscal 2019.”

Pointing to confidence in its strategic investments, the Home Depot reaffirmed its earnings guidance for 2019. That guidance calls for sales growth of about 3.3% for the year. Comparable-store sales are expected to grow about 5.0% over 2018, which had 53 weeks on the fiscal calendar.

The company also reaffirmed its diluted earnings-per-share growth guidance for the year and expects diluted earnings-per-share growth of about 3.1% from fiscal 2018 to $10.03.

At the end of the first quarter, Home Depot operated a total of 2,289 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.

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