One of the world's best home improvement retailer, Home Depot, has announced positive changes in its quarterly same store sales following the recovery of the U.S. housing market.
Home Depot announced Tuesday that the company has surpassed quarterly sales forecast with the company posting a 5.7 percent increase in domestic sales as compared to same period last year, reports CNBC. The company's overall same store sales grew to 4.2 percent during the second quarter of the year. This is higher than the average analyst estimate of 3.5 percent, based on data from the research firm Consensus Metrix.
A senior research analyst for Oppenheimer & Co., Brian Nagel, also told CNBC that Home Depot's second quarter numbers were "actually quite good" despite initial forecast that "sales could be soft here." Nagel mentioned that the company can further grow the business by penetrating the "pro customers" or meeting the needs of the contractor. He added, "Behind these results, I think we're starting to see some success of that already."
The CNBC report also mentioned that Home Depot's shares had declined in the premarket trading immediately after Tuesday's report. However, Nagel stated that the movement may be an early reaction from investors. He explained, "I wouldn't read too much into this early movement in the stock. I think as investors digest this report, they're going to come away with the view that, look, this is another very solid announcement from a very solid company that's well-positioned."
According to Reuters, Home Depot's net income rose to $2.23 billion, or $1.73 per share, during the company's second quarter which ended Aug. 2. Excluding items, the company has earned $1.71 per share, which is in line with average analyst estimates. Net sales also rose to $24.83 billion, higher than the initial estimate of $24.69 billion.
In the report, Reuters also noted that Home Depot has raised its profit forecast for the year, from an earlier estimate of $5.24 to $5.27 per share to the new range of $5.31 to $5.36 per share. The home improvement company is said to expect sales to further grow to a range of 5.2 percent to 6 percent, up from earlier estimate of 4.2 percent to 4.8 percent.
