Home Depot Inc. share price climbs, posts encouraging Q2 results, ups guidance

Home Depot Inc., the largest US home-improvement retailer, posted earnings for Q2 earlier today, to reveal a sizable increase in both sales and net income, while also increasing its full-year profit guidance.

Second quarter revenue was logged at $23.81 billion, up 5.7% on an annual basis, while net income added 13.8% at $2.1bn. A $3.5bn share buyback boosted earnings per share increase to 22.6%. Comparable store sales increased an average 5.8% worldwide.

“In the second quarter, our spring seasonal business rebounded, and we saw strong performance in the core of the store and across all of our geographies,” said CEO Frank Blake.

The Atlanta-based company also confirmed its full-year sales growth projection of 4.8%, but upped its profit forecast to $4.52 per share, 20.2% on top of 2013 earnings and 3.2% more than the previous forecast. The outlook includes another $3.5bn share buyback planned for later this year.

“This strong performance gives us further confidence that Home Depot can handle a slower paced housing market recovery on strong execution,” Citi analyst Kate McShane said in a note Tuesday morning, cited by Bloomberg. “Based on these results, the bar has now been raised for Lowe’s second quarter release tomorrow.”

The better-than-expected growth is largely attributed to an improving US economy, and well recovering housing market. Spring is usually the best season for home improvement, and analysts expect Home Depots smaller rival, Lowe’s Cos, to also report improving results in its Q2 earnings report tomorrow.

Home Depot Inc. shares added 4.07% to $86.99 per share by 15:08 GMT today, valuing the company at $114.32bn. Shares were up 15.68% from a year ago. According to the Financial Times, 24 analysts offering 12-month price targets for The Home Depot, Inc. have a median target of $92.00, with a high estimate of $100.00 and a low estimate of $75.00.