Home improvement retailer Home Depot (HD) saw its shares jump 4% after its fiscal second quarter numbers proved that customers are still interested in �more saving/more doing.�
For the period ended July 29, the company reported profit of $1.53 billion or $1.10 a share, up from $1.36 billion or 86 cents per share a year prior.
Analysts had forecast earnings of 97 cents on revenue of $20.74 billion.
In May, Home Depot said that the warm weather in the first quarter would take away from its anticipated sales in the second quarter, but in today’s report the company said that it was still thriving due to �continued demand for core products.�
This news comes on the heels of Home Depot�s August 7 announcement of the acquisition of U.S. Home Systems (USHS), a provider of kitchen and bathroom refacing products and home organization systems, for $93 million.
Janney Capital Markets analyst David Strasser who rates Home Depot at Neutral, is concerned about the second half of the year.
�Our take is that the numbers were better than our estimate, particularly on the sales line, but we remain less optimistic about comp acceleration in the back half of the year given consumer spending trends,� wrote Strasser in a note. �The company continues to impress us operationally, but that in our opinion is largely priced into the stock at about 10 times Ebitda.�
– Grace L. Williams
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