Home Depot Inc. (HD) reported better-than-expected same-store sales in the quarter, driven by strong demand from contractors and retail customers. The company also added that it expects same-store sales and profits for the year to reach the high end of its forecasts.
The positive news drove Home Depot’s stock up 2.5% in premarket trading.
In the quarter, consumers spent more money on housing, appliances, home-improvement products and autos than discretionary items. Sales at Home Depot have also benefited from a recovering housing market, which continues to gain traction. In the month of October, builders’ confidence jumped to a 10 year high.
The positive results reported by Home Depot are a strong contrast to department store operators Nordstrom (JWN) and Macy’s Inc. (M), which reported weak results last week.
Last week, Home Depot shares were down 4.7%, which was still less than the 6.6% decline seen in S&P 500’s retail index. Lowe’s Cos Inc. (LOW), Home Depot’s smaller rival, is also expected to release a positive report. The company’s results will be reported on Wednesday.
Same-store sales for Home Depot jumped 5.1% in the quarter, which was well above the 4.6% growth analysts were expecting. Comparable sales in the U.S. rose 7.3%. Analysts were expecting an increase of 5.9%.
Home Depot expects that its overall same-store sales will increase 4.9% in the year.