ATLANTA - Home Depot's fiscal first-quarter net income climbed 12 per cent, helped by better sales, but results fell short of expectations as a cold and rainy spring hurt results.
The company said May sales were "robust" and the No. 1 home improvement retailer raised its full-year earnings forecast. Shares rose almost 2 per cent in morning trading.
Spring is the biggest season for home improvement retailers as homeowners and others work on their yards and gardens.
Meanwhile, the U.S. housing market has emerged from a deep slump, aided by rising home prices, steady job growth and fewer troubled loans dating back to the housing-bubble days. While the housing market has recently struggled to maintain that momentum, many home owners are spending more to renovate their homes.
"The first quarter was impacted by a slow start to the spring selling season. But we had solid results in non-weather impacted markets and expect our sales for the year to grow in line with the guidance we previously provided," said CEO Frank Blake.
The Atlanta-based retailer earned $1.38 billion, or $1 per share, for the three months ended May 4. That compares with $1.23 billion, or 83 cents per share, a year earlier.
The latest quarter's results included a benefit of 4 cents per share related to the sale of part of its equity ownership in HD Supply Holdings Inc.
Stripping out the benefit, earnings amounted to 96 cents per share. Analysts, on average, expected earnings of 99 cents per share, according to a FactSet survey.
Revenue for the Atlanta company rose 3 per cent to $19.69 billion, but missed Wall Street's estimate of $19.97 billion.
Sales at U.S. stores open at least a year increased 3.3 per cent. For the entire company, the metric rose 2.6 per cent.
These figures are a key indicator of a retailer's health. They exclude results from locations recently opened or closed.
Home Depot now foresees fiscal 2014 earnings of $4.42 per share. Its prior guidance was for earnings of $4.38 per share. Analysts expect full-year earnings of $4.41 per share.
The chain reaffirmed its outlook for 2014 revenue to rise by about 4.8 per cent. Based on 2013's revenue of $78.81 billion, this implies approximately $82.6 billion. Wall Street expects revenue of $82.62 billion.
Home Depot's smaller rival Lowe's Cos. reports results on Wednesday.
Home Depot had 2,263 stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico at the end of the first quarter.
Shares rose $1.34, or 1.8 per cent, to $77.84 in morning trading. The stock has dipped 6 per cent since the beginning of the year.