NEW YORK (AP) — A busy spring pushed Home Depot's first-quarter profit and revenue above Wall Street expectations and the home improvement retailer raised its projections for both in 2015.
Sales at U.S. stores open at least a year was also better than most had expected, rising 7.1 percent.
Many retailers have been struggling, but that is not the case at companies that cater to home owners. Both Lowe's and Home Depot have seen comparable-store sales in the U.S. rise for three consecutive quarters now.
And on Tuesday, the U.S. released housing data that backed up economist predictions of a housing market that may be about to take off. According to the Commerce Department, housing starts last month increased to a pace that has not been seen since the start of the recession.
That activity is playing out increasingly in the aisles of Home Depot.
"We had a stronger than expected start to the year as we experienced a more normal spring across much of the country and continued recovery of the U.S. housing market," said Chairman and CEO Craig Menear.
Home Depot earned $1.58 billion, or $1.21 per share, for the three months ended May 3. That compares with $1.38 billion, or $1 per share, a year earlier.
Earnings, adjusted for pretax gains came to $1.16 per share, a penny better than analysts had expected, according to a survey by Zacks Investment Research.
Revenue climbed to $20.89 billion from $19.69 billion, also edging out expectations.
The Home Depot Inc. now sees 2015 earnings rising about 11 percent to 12 percent, to $5.24 to $5.27 per share. That tops Wall Street per-share earnings projections of $5.23, according to FactSet.
Revenue is expected to climb approximately 4.2 percent to 4.8 percent. Its prior guidance was for earnings between $5.11 and $5.17 per share, with revenue increasing about 3.5 percent to 4.7 percent.
The housing data from Tuesday suggests builders have broken out of a slump and are now responding to tight housing inventories.
Approved building permits jumped 10.1 percent from March to April as a nasty winter loosened its grip, meaning more homes on the market and potentially, more shoppers walking through the door at Home Depot.
Carol Tome, chief financial officer, said during a conference call Tuesday that it appears that a million new households will be created this year, which she called "awesome."
Home Depot said that, other than $7 million in data breach-related costs in its first-quarter earnings, it currently isn't able to estimate the range of costs related to a data breach discovered in September. The chain said that the costs may have a material adverse impact on its fiscal 2015 results and those for future periods.
Shares slipped 66 cents to $113.67 in early trading.
Home Depot had 2,270 stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico at the first quarter's end.