* Maintains full-year sales growth forecast
* Says most sales lost in 1st qtr to be realized in 2nd qtr
* Shares rise 2.7 pct
(Adds CEO comment, details; updates shares)
By Maria Ajit Thomas
May 20 Home Depot Inc, the world's
largest home improvement chain, said its sales were "robust" in
May and that it expected to realize in the current quarter most
of the sales lost in the first quarter due to a severe winter in
the United States.
Shares of the company, which reported lower-than-expected
first-quarter sales, rose 2.7 percent in morning trading on
Home Depot said its sales of landscape items and products
such as concrete were improving as a result of repairs needed
after the harsh winter weather.
The company gets much of its business from building
contractors, who are vulnerable to weather-related disruptions.
Spring is also an important time for the company, as households
prepare their gardens and get set for the barbecue season.
Home Depot 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, 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.
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, however, said that though housing statistics
were not as robust as last year, they were not materially
different from the assumptions the company based its
"Our fundamental view of the recovery in the home
improvement market has not changed," Chief Executive Francis
Blake said on a post-earnings call.
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 share buybacks this
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 12 percent to $1.38 billion, or $1.00 per
share. 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 shares were up at $78.60 on the New York Stock
Exchange. The stock fell 7 percent this year to Monday's close.
(Editing by Kirti Pandey)