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Today, Home Depot (HD) released its results for the second quarter of fiscal 2019, closed August 4th. The company reported EPS of $ 3.17, exceeding the consensus estimate of $ 3.08 for analysts. Home Depot's revenue of $ 30.8 billion for the quarter is slightly below analysts' estimates. Its turnover increased 1.2% year-on-year (year-over-year) and same-store sales by 3%. Same store sales in the United States increased 3.1%. The increase in the Company's sales relative to its comparable stores is an additional week in fiscal 2018.
The average amount of Home Depot bills increased 1.7% to $ 67.3 in the second quarter. Large transactions over $ 1,000 increased 3.7% during the quarter. These transactions accounted for approximately 20% of total sales in the United States. The total number of transactions remained stable year-on-year.
Outlook for the 2019 financial year
Home Depot also updated its outlook for fiscal 2019. The company lowered its revenue growth forecast for 2019 to 2.3% from its previous forecast of approximately 3.3%. The company expects the decline in wood prices to lead to growth in sales. About 8% of the company's sales come from lumber sales, which means that lower lumber prices affect its sales.
Home Depot also lowered its revenue growth forecast to comparable 4%, up from 5% for the year. Falling lumber prices had a negative impact on the Company's comparable sales growth of approximately $ 340 million in the second quarter.
The company expects that recently announced rates will affect consumer spending, which could affect sales. In addition, he expects rates to increase his cost of sales by about 2%.
Why Home Depot's action soared
Despite its weaker sales growth prospects, Home Depot shares were up 4% this morning. In comparison, the S & P 500 index was down about 0.5%. Investors were impressed by the company's strong performance for the second quarter of fiscal 2019, as well as by its EPS growth forecasts for 2019. The company has reaffirmed its EPS growth forecast for 2019 of 39, about 3.1%. Although it expects its sales to grow less than expected, it expects to meet its EPS growth forecasts.
Home Depot shares have grown about 26% since the beginning of the year, outperforming the 16% increase in the S & P 500 Index.
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