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The
company's shares rose 4% to $307.99 in premarket trading as Home
Depot also posted a surprise increase in quarterly same-store
sales.
During the COVID-19 lockdowns people took up several
do-it-yourself (DIY) home projects and hired professionals to
upgrade their homes, lifting sales at Home Depot and smaller
rival Lowe's Cos Inc in 2020.
Sales from DIY customers have slowed with the easing of
pandemic-related curbs, according to analysts.
However, demand from home-improvement professionals is holding
up despite price increases of products due to higher lumber and
copper costs.
About 40% to 45% of Home Depot's customers are professionals,
compared with 20% to 25% for Lowe's, according to brokerage
Jefferies.
Home Depot now expects comparable sales to increase about 3% in
fiscal 2022, compared with its previous forecast of a slight
positive growth. Analysts were expecting a 1.4% increase,
according to IBES data from Refinitiv.
The U.S. housing market remains hot amid tight supply helping
sales at Home Depot and Lowe's, even as rising mortgage rates
might be a dampener in the coming months.
Home Depot expects earnings per share growth to be in the
mid-single digits percentage range in fiscal 2022, compared with
its previous forecast of low-single digits percentage growth.
Expect sales and profit trends at Home Depot to help allay
widespread market concerns of easing consumer spending at least
for a while, Oppenheimer analyst Brian Nagel said.
Same-store sales rose 2.2% in the first quarter ended May 1,
compared with analysts' estimates of a 2.7% decline.
Home Depot earned $4.09 per share in the reported quarter,
beating estimates of $3.68.
(Reporting by Praveen Paramasivam in Bengaluru; Editing by
Shounak Dasgupta)
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