Home Depot Inc (NYSE: HD) reported yet another earnings beat and issued solid fourth-quarter guidance on Tuesday. Analysts say Home Depot remains the gold standard of the home improvement market, and the company will likely…
Home Depot Inc (NYSE: HD) reported yet another earnings beat and issued solid fourth-quarter guidance on Tuesday. Analysts say Home Depot remains the gold standard of the home improvement market, and the company will likely continue to gain market share in 2019.
HD reported third-quarter adjusted earnings per share of $2.51 on revenue of $26.30 billion. Both numbers topped consensus analyst estimates of $2.26 and $26.26 billion, respectively. Revenue was up 5 percent from a year ago.
All-important same-store sales were also up 4.8 percent, beating Wall Street expectations of a 4.7 percent gain. Home Depot reported 6.6 percent same-store sales growth in the second quarter.
Customer transactions in the third quarter were up 1.4 percent, and average ticket size was up 3.6 percent to $65.11.
Home Depot CEO Craig Menear says the company is seeing healthy digital sales growth and bullish demand trends.
“We are pleased with our third quarter results and the growth that we saw from both our professional and do-it-yourself customers,” Menear says in a statement. “Our customers continue to respond to our expansive assortment and enhancements we are making to drive an interconnected shopping experience.”
Looking ahead, Home Depot raised its full-year revenue growth guidance from 7 percent to 7.2 percent. The company also increased its full-year same-store sales growth projection from 5.3 to 5.5 percent and upped its EPS target from $9.42 to $9.75.
Bank of America analyst Elizabeth Suzuki says Home Depot’s strategy of aggressively investing its tax savings in labor, renovation, supply chain, services and omnichannel distribution will pay dividends for investors in 2019.
“We expect these investments to continue into 2019, per the company’s commentary, and believe that HD will continue to take market share from smaller and independent home improvement retailers, which still comprise about half of the DIY home improvement retail market and almost two-thirds of the professional market,” Suzuki says.
Bank of America has a “buy” rating and $219 price target for HD stock.