* EPS 60 cents vs. Wall Street estimate 58 cents
* Sales up 4.4 pct to $17.33 bln, topping estimates
* Raises fiscal-year profit outlook
* Ups quarterly dividend by 16 pct to 29 cents/shr
By Dhanya Skariachan
Nov 15 Home Depot Inc raised its
fiscal-year outlook for the third time in six months as a host
of efforts to improve distribution and boost customer service
helped the No. 1 home improvement chain gain share from
archrival Lowe's Cos Inc .
Home Depot, which reported stronger-than-expected
quarterly results on Tuesday, also raised its quarterly
dividend by 16 percent to 29 cents per share.
The news came a day after Lowe's also beat quarterly
profit estimates and laid out a blueprint to win back shoppers
from its larger competitor.
Home Depot has benefited from more centralized
distribution centers, better merchandising tools, efforts to
shift more employees to jobs where they serve customers
directly and the use of more technology in stores.
The company has also been quicker to cut costs than
Lowe's, and in some cases has benefited as housing markets
have improved in regions where it has a heavy presence.
Home Depot has also gained from its slower expansion
strategy. Under Chief Executive Frank Blake, Home Depot has
been closing concept stores and upgrading service and products
in its core retail business to win market share from Lowe's.
Blake, who became chairman and CEO in early 2007 after
Robert Nardelli resigned, returned the company's focus to
being the regular big-box strip-mall type store and improving
its merchandise, supply chain and customer service.
"Overall, they are just out-executing Lowe's at this
point," RBC Capital Markets Scot Ciccarelli said. "Lowe's is
trying to copy a lot of these same efforts that I think have
helped Home Depot, but it is going to take a while for them to
benefit from some of the changes that they are currently
Home Depot's sales at stores open at least a year rose 4.2
percent globally, including a 3.8 percent rise in the United
States. This was the 10th consecutive quarter that the company
has outshone Lowe's, whose same-store sales rose 0.7 percent
in the quarter. Both chains got a lift from sales related to
The home improvement industry grew 2 percent in the 12
months ending September 2011, a report from market research
firm NPD showed. However, the industry -- pressured by the
weak economy and housing market -- is still down 7 percent
compared with the same time period in 2009.
"We still don't see and we don't expect to see in the near
term any meaningful tailwind from the housing market," Home
Depot's CEO said on Tuesday, echoing comments from Lowe's CEO
Robert Niblock earlier this week.
Net income rose to $934 million, or 60 cents a share in
the third quarter ended on Oct. 30, from $834 million, or 51
cents a share, a year earlier.
Analysts on average were expecting a profit of 58 cents a
share, according to Thomson Reuters I/B/E/S.
Sales rose 4.4 percent to $17.33 billion, beating the
analysts' average estimate of $17.12 billion.
For the current fiscal year, Home Depot sees earnings of
$2.38 a share, up from its prior outlook of $2.34. It
continues to expect sales to rise 2.5 percent in the period.
The strong results from Home Depot coincided with a
report from the Commerce Department that showed U.S. retail
sales rose broadly in October, suggesting the economy started
the fourth quarter with some strength.
Home Depot shares, which had risen as much as 1.3 percent
earlier on Tuesday, were down 8 cents at $38.17 on the New
York Stock Exchange.