Home Depot Reports Earnings Beat, Raises Dividend

Home Depot Inc (NYSE: HD) stock moved slightly higher on Tuesday after the company reported better-than-expected fourth-quarter earnings and revenue numbers and says it expects more of the same in 2018.

Home Depot reported quarterly adjusted earnings per share of $1.69 on revenue of $23.9 billion. Both numbers topped consensus analyst expectations of $1.61 and $23.7 billion, respectively. Same-store sales also grew 7.5 percent compared to consensus estimates of 6 percent growth.

Revenue was up 7.5 percent year-over-year, the total number of customer transactions was up 2 percent and average ticket size increased 5.5 percent to $64, all signs of healthy fundamental performance.

Not surprisingly, Home Depot is sharing some of its success with its employees and investors. In January, Home Depot announced all of its U.S. hourly employees will receive bonuses of between $200 and $1,000 in the wake of the recent corporate tax cuts. On Tuesday, the company announced it is raising its quarterly dividend by 15.7 percent to $1.03 per share, a yield of 2.1 percent based on Tuesday’ morning’s share price.

“Our ongoing commitment to enhance the interconnected retail experience for our customers, provide localized and innovative product, and deliver best in class productivity resulted in record sales and net earnings for 2017,” CEO Craig Menear says in a statement.

Looking ahead to 2018, Home Depot sees no signs of a slowdown in its home improvement business. The company guided for 6.5 percent revenue growth and 5 percent same-store sales growth in 2018. Home Depot also reaffirmed its previous outlook of up to $120 billion in sales by 2020.

Bank of America analyst Elizabeth Suzuki says it should be smooth sailing for the next several years since the home improvement businesses of Home Depot and Lowe’s Companies (LOW) are relatively insulated from online competition from Amazon.com (AMZN) and others.

“We continue to believe that the macro backdrop for growth in home improvement spending is favorable, and that HD is also well-positioned to continue its solid track record of share gains,” Suzuki says. “HD still has…

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