As housing prices rise, Home Depot profits
If Home Depot Inc.’s results are any indication, Americans are showing no sign of putting down their tool belts.
Profit increased to $1.44 a share last quarter, the Atlanta-based company said Tuesday. That topped analysts’ estimates and came along with strong sales and a plan to return more cash to shareholders.
The largest home-improvement retailer is benefiting from a yearslong rebound in housing prices that has made homeowners more willing to spend on their properties because they see them as a sound investment. That’s helped Home Depot avoid the malaise that has spread across much of retail, where lackluster demand has weighed on results.
“The market had growing fears around trends in the home-improvement category due to rising interest rates and a commensurate drop in mortgage refinancing — which is often used for larger projects,” David Schick, director of research and lead retail analyst for Consumer Edge Research, said in an email. “Home Depot fourth-quarter results and guidance reconfirmed consistent demand and the structural strength of their business model.”
The shares rose as much as 1.9 percent to $145.65 in New York. Home Depot already had gained 6.7 percent this year.
Revenue climbed 5.8 percent to $22.2 billion in the fourth quarter, which ended Jan. 31, surpassing analysts’ $21.8 billion projection. Sales at stores open for more than a year — a key benchmark for investors — rose 5.8 percent. That beat analysts’ 3.5 percent prediction, according to Consensus Metrix.
The company’s quarterly dividend rose 29 percent to 89 cents a share.