* Second-qtr same-store sales rise 5.8 pct
* U.S. same-store sales increase 6.4 pct
* Raises full-year profit forecast to $4.52/shr from $4.42
* Shares rise 6.5 pct to all-time high of $88.99
(Adds analysts' comments; updates shares)
By Sruthi Ramakrishnan
Aug 19 Home Depot Inc said it expected
same-store sales to grow faster in the second half of the year
as customers renovate homes with big-ticket purchases such as
wood and laminate flooring in a recovering U.S. housing market.
Shares of the world's largest home improvement chain rose as
much as 6.5 percent to an all-time high of $88.99, adding more
than $7 billion to the company's market value after it also
reported better-than-expected quarterly results.
An improving U.S. jobs market is encouraging people to
undertake larger home remodeling projects, David Crowe, chief
economist at the National Association of Home Builders, said in
People also spent more on repairing winter-related damage to
their houses, helping Home Depot recover most of sales it lost
in the first quarter, Wedbush Securities analyst Seth Basham
wrote in a note on Tuesday.
Home Depot expects same-store sales growth in the second
half to be 80 basis points higher than the first half, Chief
Financial Officer Carol Tome said on a conference call.
The company, however, maintained its full-year sales growth
forecast of about 4.8 percent, which Canaccord Genuity analyst
Laura Champine called "somewhat conservative."
She said Home Depot was expected to gain market share on the
strength of its product assortment and in-store execution.
The company controlled 19.2 percent of the U.S. home
improvement market in 2013, up from 17 percent in 2006,
according to Euromonitor International. In the period, smaller
rival Lowe's Cos Inc's share grew to 15.6 percent from
Lowe's, the world's second-largest home improvement company,
is scheduled to report results on Wednesday.
Lowe's shares rose 3 percent to $51.98 on Tuesday.
Tome said there was a "nice recovery" in demand from
building contractors as "customers clearly feel better about
investing in their homes." Home Depot gets much of its business
from building contractors.
Purchases of over $900 rose 8.4 percent in the second
quarter ended Aug. 3, driven by sales of appliances, windows,
water heaters, wood and laminate flooring.
U.S. housing starts rebounded strongly in July, Commerce
Department data showed on Tuesday, signaling that the housing
market is regaining its footing after being hurt by last year's
runup in interest rates.
Home Depot, however, said it was concerned about the
availability of mortgage financing, given that a third of
Americans aged 18-36 were living with their parents.
"Something has got to move on mortgage financing reform ...
we continue to pay real close attention to that," Tome said.
STRONG SECOND QUARTER
Home Depot's same-store sales rose 5.8 percent in the second
quarter, higher than the 4.4 percent analysts polled by research
firm Consensus Metrix had expected.
Same-store sales grew 6.4 percent in the United States,
where Home Depot has more than 85 percent of its stores.
"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," Chief Executive Frank
Blake said in a statement on Tuesday.
A severe winter had delayed the onset of spring in the
United States, hurting Home Depot's first-quarter sales.
Spring is an important time for home improvement retailers,
as customers begin to repair snow-damaged homes and gardens and
get set for the barbecue season.
Home Depot raised its full-year profit forecast to $4.52 per
share from $4.42. The revised forecast includes the impact of a
$3.5 billion share buyback plan.
Net income rose 14.5 percent to $2.05 billion, or $1.52 per
share, in the second quarter, while revenue increased 5.7
percent to $23.81 billion.
Analysts on an average had expected a profit of $1.45 per
share and revenue of $23.61 billion, according to Thomson
Home Depot's shares were up 6 percent at $88.67 in afternoon
trading on the New York Stock Exchange. The stock was the top
percentage gainer on the Dow Jones Industrial Average Index
, which was up 0.5 percent.
(Editing by Kirti Pandey)