Home Depot’s forth-quarter results were better than expected in many areas, while the quarterly dividend was boosted by the green light the company gave to an $18 billion buyback plan.
Financial analysts claim that incredible performance of the American retailer of home improvement goods and services are due to the strong sales during the Christmas season, as well as to those during the Thanksgiving period.
On Tuesday, HD stock price rose 3 percent after hitting an all-time high after the earning report had been released. The Home Depot’s fourth quarter profit increased to $1.38 billion, while its revenue was $19.16 billion, better than the Street’ expectations of $18.68 billion.
For the period that ended Feb. 1, the profit per share was $1.05 with a boost from the partial sale of the HD Supply. The figure is also better than estimated since analysts forecasted an 89 cents profit.
After having released the report, Craig Menear, chief executive and chairman of Home Depot, told investors during a conference call that the sales were strongly backed by customer spending on its Christmas decoration and gift department, as well by the Black Friday and Cyber Monday deals.
According to the Q4 report, the average sales at the stores staying open for at least a year rose by 7.9 percent and by 8.9 percent if we only take into account the Home Depot U.S. stores.
According to the HD executive vice president of merchandising, categories such as decor building materials, tools, lightning, lumber, hardware, and millwork displayed an increased customer demand over the last quarter.
But Home Depot management is now concerned about how a strong dollar may impact the oversea sales over the course of this year.
“If currency exchange rates remain where they are today, this would cause a negative impact to fiscal 2015 net sales growth of approximately $1 billion,”
the company briefed its investors.
Additionally, the diluted earnings per share may face a negative impact of about 6 cents per share. Currency fluctuations have also affected the low-end of HD sales and the last year’s earnings-per-share growth, according to the company.
But Home Depot expects a boost in sales if the housing market starts to improve, although the National Association of Realtors announced on Monday that housing sales were at the lowest level since April 2014.
However, the Home Depot has already hired more than 80,000 workers to help with the sales expected to occur this spring and in summer. Despite the grim news, in February home sales were 3.2 percent faster than in last year’s January.
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