First-quarter same-store sales at all Home Depot locations rose 6.1% year over year and 7.1% in the United States.
Home Depot raised its dividend by 25.5% from a quarterly rate of $0.47 to a new rate of $0.59 per share. The company also authorized a new $18 billion share repurchase program that it expects to use by the end of fiscal 2017.
The company raised its full-year sales guidance from a prior range of 3.5% to 4.7% to a new range of 4.2% to 4.8%. Same-store sales for the full year are now forecast to rise 4% to 4.6%, compared with an estimate of 3.3% to 4.5% previously. The forecast for diluted EPS has been raised from a previous range of 8.5% to 10.5% to a new range of 11% to 12%. That is up from $5.11 to $5.17 to a new range of $5.24 to $5.27. EPS guidance includes the effect of a tax benefit and share buybacks over the course of the year.
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Estimates do not include an accrual for losses related to the data breach of September 2014. The company took a charge of $7 million in the first quarter for costs related to the breach. Also note that the low-end of Home Depot’s sales, same-store sales and diluted EPS growth guidance reflects the U.S. dollar remaining at current foreign exchange rates.
In 2014 Home Depot posted $83.18 billion in sales. At the low end of 2015 guidance sales will grow to $86.67 billion; at the high-end sales would total $87.17 billion.
The consensus estimates for the second quarter call for $1.70 in EPS on sales of $24.65 billion. For the full year analysts are looking for EPS of $5.23 on sales of $86.87 billion.
Home remodeling also suffered from a downturn in the first quarter with the National Association of Home Builders (NAHB) remodeling index down from an all-time high 60 at the end of December to 57. The NAHB blames nasty weather and labor shortages, but it could be that analysts and investors are wary of a continuing slowdown.
The stock traded down about 1.2% in Tuesday’s premarket to $113.00. The stock’s 52-week range is $76.37 to $117.99 and the consensus price target is about $123.00. The highest target is $135.00.
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