The Home Depot Inc.’s (HD) fiscal 2010 first-quarter GAAP net income jumped 41% to $725 million from $514 million in the year-ago period. Excluding special items, adjusted earnings per share came in at 45 cents, which topped the Zacks Consensus Estimate of 40 cents derived from 24 covering analysts. Shares of Home Depot have gained 0.65% in pre-market trading on the New York Stock Exchange.
Bolstered by the better-than-expected quarterly performance, Home Depot also raised its earnings guidance for fiscal 2010 to $1.88 per share on revenue growth of 3.5% over $66.2 billion recorded in fiscal 2009. The company earlier predicted earnings of $1.79 per share on a revenue growth of 2.5%.
The revised earnings guidance for fiscal 2010 is a penny above the Zacks Consensus Estimate of $1.87 per share, which moved up by 4 cents over the past month as 18 of 29 covering analysts raised expectations. Analysts are also bullish for next fiscal year, with the Zacks Consensus Estimate moving up by 5 cents over the past month to $2.21 per share. Sixteen of 26 covering analysts increased projections.
Meanwhile, total sales for the quarter recorded growth of 4.3% to $16.9 billion from $16.2 billion in the prior-year quarter. Home Depot’s total same-store sales grew 4.8%, while same-store sales for U.S. stores rose 3.3%. Growth was mainly driven by higher sales of seasonal items. This was aided by a 4.2% year-over-year growth in the number of customer transactions to 323 million, indicating improvement in macroeconomic conditions.
Home Depot’s gross margin for the quarter increased 70 basis points (bps) to 34.4% from 33.7% in the year-ago period. Operating margin for the quarter expanded 170 bps to 7.7% versus 6.1% in the prior year quarter.
At the end of the quarter, Home Depot had cash and cash equivalents of $2.4 billion and long-term debt of $7.7 billion, compared to $2.2 billion of cash and $9.7 billion of long-term debt in the year-ago period.
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