FILE PHOTO – A Home Depot employee is seen outside a store in Los Angeles, California March 17, 2015. REUTERS/Lucy Nicholson/File Photo
(Reuters) – Home Depot Inc (HD.N) topped Wall Street estimates for quarterly comparable-store sales on Tuesday, as consumers faced with a shaky U.S. housing market spent more on average at the country’s No. 1 home improvement chain.
Shares of Home Depot rose 2.3 percent to $183.50 in early trading, after the retailer also raised its forecast for annual sales and profit ahead of the holiday shopping season.
Sales at U.S. Home Depot stores open for more than a year rose 5.4 percent during the third quarter ended Oct. 28, above analysts’ expectations of a 4.38 percent increase, according to IBES data from Refinitiv.
The number of customer transactions at Home Depot stores rose 1.4 percent, while the average check increased 3.6 percent.
“We believe (the results are) a testament to the overall strength of demand in the home improvement market,” Home Depot Chief Executive Officer Craig Menear said.
An uncertainty over future home prices and a shortage of properties for sale may push homeowners and contractors to remodel homes over buying or building houses, spurring demand for Home Depot products.
The Atlanta-based retailer now expects sales to rise 7.2 percent in the year ending January, compared with an earlier forecast of 7 percent growth. It raised its earnings forecast to $9.75 per share from the prior $9.42.
Home Depot’s third-quarter net earnings rose to $2.87 billion or $2.51 per share, from $2.17 billion or $1.84 per share a year earlier. Earnings topped analysts’ average estimate of $2.26 per share.
Net sales overall rose 5.1 percent to $26.30 billion, edging past analysts’ expectations of $26.26 billion.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Sai Sachin Ravikumar