Home Depot raises forecast as housing market boosts sales

  • Bloomberg News
  • Tuesday, August 18, 2015 3:36pm
  • Business

Home Depot boosted its earnings and sales forecasts for the year as the continued rise of U.S. home prices encourages Americans to fix up their houses.

Profit this year will be $5.31 to $5.36 a share, including the planned completion of the Interline Brands acquisition, the Atlanta-based company said Tuesday in a statement. That’s up from a previous forecast of $5.24 to $5.27. Analysts estimated $5.27, not including the Interline takeover.

The world’s largest home-improvement retailer is benefiting from 40 straight months of rising U.S. housing prices, which make homeowners more confident about investing in their dwellings. Americans also may be betting on future gains, since home prices still haven’t returned to their 2006 peak.

The results strengthen the “view that the home-improvement sector will continue to meaningfully outpace the rest of the retail sector,” Scott Tuhy, a senior credit officer at Moody’s Investors Service, said in an e-mail.

The shares already had gained 14 percent this year through Monday. Lowe’s Cos., which is scheduled to report earnings on Wednesday, climbed 5.3 percent in that period.

Net income in the three months through Aug. 2 increased 9 percent to $2.23 billion, or $1.73 a share, from $2.05 billion, or $1.52, a year earlier. Excluding some items, profit was $1.71 a share, matching analysts’ estimates. Sales rose 4.3 percent to $24.8 billion, topping projections.

Home Depot’s same-store sales, which includes revenue only from established stores, rose 4.2 percent, with an increase in the number of transactions driving most of the gain. Analysts projected a 3.5 percent gain, according to Consensus Metrix.

That measure is especially important to Home Depot because it has basically stopped opening new stores— once a key driver of its growth— and is now focused on increasing revenue through Web purchases and getting more out of its existing locations.

Same-store sales will increase as much as 4.9 percent this year, the company said. That’s up from a forecast of a gain as high as 4.6 percent that the retailer provided in May.

Home Depot announced the purchase of Interline for $1.63 billion last month, part of a strategy of selling more supplies to customers in the building and maintenance professions. The Jacksonville, Florida-based company markets and distributes products such as Barnett pro contractor supplies and Wilmar janitorial equipment through 90 locations.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.