Home Depot Squeezes a 12% Net Profit Gain on Lower Sales and Lower Costs

“Home Depot Inc.’s first-quarter profit rose 12% as the retailer saw a surprise drop in sales, though costs declined.

The company raised its current-year earnings forecast to $2.24 from its February view of $2.20. The updated prediction includes the company’s share-buyback activity year-to-date.

The largest home-improvement retailer reported strong results last year as a multiyear decline in sales halted. Moody’s Investors Service and Fitch Ratings raised their respective outlooks on the company in March, following strong fourth-quarter results.

Smaller rival Lowe’s Cos. on Monday reported a surprise drop in first-quarter sales and reduced its guidance for the year.

For the quarter ended May 1, Home Depot reported a profit of $812 million, or 50 cents a share, up from $725 million, or 43 cents a share, a year earlier. The year-earlier result included a two-cent charge related to the extension of a loan guarantee.

Sales dipped 0.2% to $16.82 billion. Same-store sales decreased 0.6% and were 0.7% in the U.S.

Analysts polled by Thomson Reuters most recently forecast earnings of 49 cents on $17.02 billion in revenue.”

Full article