Hurricane sales boost Home Depot’s profit
Home Depot Inc., the world’s largest home-improvement chain, reported third-quarter earnings that got a boost from homeowners preparing for and picking up after Hurricane Irene.
For the three months ended Oct. 30, the Atlanta company said its net income jumped 12% to $934 million, or 60 cents a share, from $834 million, or 51 cents, a year earlier.
The report Tuesday came a day after its closest competitor, Lowe’s Cos., showed a plunge in earnings. Profit at the North Carolina company dropped 44.3% year over year to $225 million, with earnings per share down to 18 cents from 29 cents. Lowe’s had previously announced that it would close 27 stores this year.
Home Depot’s 2,246 stores in North America, Mexico and China saw an increase in customers willing to spend more money. The number of transactions increased 1.2% to more than 325 million, and the average price per purchase rose 3% to $53.03.
Sales at locations open more than a year grew 4.2%. Home Depot instituted several new initiatives over the quarter, including a system for customers to buy online and pick up in-store.
Total sales rose 4.4% to $17.3 billion. On the East Coast, stores saw sales increases in August because of Hurricane Irene.
In a conference call with analysts, Home Depot’s chief executive, Robert Niblock, said the company could not count on an end to the housing slump in the foreseeable future.
“In the U.S., we still don’t see and we don’t expect to see in the near term any meaningful tail wind from the housing market,” Niblock said. “Inventories remain high. Pricing is under pressure, and credit is still difficult.”
The company’s stock slipped 18 cents to $38.07 on Tuesday.
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