(Corrects first bullet point and adds paragraph 17 to reflect
that the company's profit, excluding a benefit from a share
sale, is comparable with average analyst estimate)
* First-quarter adjusted earnings $0.96/share vs est. $0.99
* Sales rise 2.9 pct to $19.69 bln vs est. $19.95 bln
* Reiterates full-year sales growth forecast
* Shares down 1 pct premarket
By Maria Ajit Thomas
May 20 Home Depot Inc reported
lower-than-expected quarterly sales as its spring selling season
got off to a slow start after a severe winter in many parts of
the United States.
The world's largest home improvement chain gets much of its
business from building contractors, who are vulnerable to
weather-related disruptions. Spring is also an important time
for Home Depot, as households prepare their gardens and get set
for the barbecue season.
Home Depot shares fell 1.4 percent in premarket trading.
The company maintained its sales growth forecast of 4.8
percent for the year ending January, but analysts were
A slowing recovery in the U.S. housing market could make it
difficult for Home Depot to meet its reiterated sales growth
forecast for the year, they said.
"We remain neutral as we worry that a weaker housing market
will impact sales as the year progresses," Janney Capital
Markets analyst David Strasser wrote in a note.
Home Depot said it had "solid results" in markets that were
not affected by harsh winter weather.
Brian Sozzi, chief executive of Belus Capital Advisors, said
slowing U.S. home sales have left Home Depot stores with high
inventory of building supplies such as lumber, plywood and
U.S. homebuilder sentiment weakened unexpectedly in May to
its lowest in a year, the National Association of Home Builders
said last week.
Sales of previously owned homes fell each month in the first
quarter, while new home sales declined in February and March.
Home Depot rival Lowe's Cos Inc will report its
results on Wednesday.
Home Depot also raised its full-year earnings forecast to
$4.42 per share from $4.38 per share.
The increase reflects a 4 cents per share benefit from the
sale of shares in HD Supply Holdings Inc and Home Depot's share
buybacks this year.
The company said it intended to buy back up to $3.75 billion
additional shares this year.
Home Depot's sales rose 2.9 percent to $19.69 billion in the
first quarter ended May 4. Comparable-store sales increased 2.6
Net income rose to $1.38 billion, or $1.00 per share, in the
first quarter from $1.23 billion, or 83 cents per share, a year
The company earned 96 cents per share, excluding a 4 cent
benefit related to the sale of HD Supply shares.
Analysts on average had expected a profit of 99 cents per
share on sales of $19.95 billion, according to Thomson Reuters
Home Depot's shares were trading at $75.36 before the bell
on Tuesday. Lowe's stock was down about 1 percent at $45.15.
(Editing by Kirti Pandey)