Home Depot reported fourth-quarter sales and earnings that beat Wall Street estimates as the retailer continued to benefit from a strong U.S. housing market.
Excluding certain items, the company earned $1.74 billion, or $1.44 per share, on revenue of $22.21 billion. Analysts had forecast earnings of $1.34 and revenue of $21.8 billion.
Comparable store sales showed a 5.8% increase, beating analysts’ average estimate of a gain of 3.5%, percent. Same-store sales in the U.S. rose 6.3%.
“Home Depot is gaining share in a number of high value categories, including appliances,” GlobalData Retail analyst Håkon Helgesen wrote in a research note, attributing part of the gain to “the poor performance of Sears, which has traditionally been a destination for appliance purchasers, but is now ceding share.”
As CNBC reports, Home Depot “has benefited from a stronger economy and rising home values, which have encouraged shoppers to invest in their homes. Even as the company faced tough comparisons from the prior-year period, analysts expected it to perform better than the broader retail space due to this ongoing shift in consumer spending.”
America’s largest home improvement retailer said transactions over $900, which represent about 20% of U.S. sales, rose 11.6% during the holiday quarter, as customers spent more on flooring products and appliances.
For full-year 2016, overall sales rose 6.9% to $94.6 billion, while earnings increased 18.1% to $6.45. “Our focus on providing localized and innovative product selection, improving the interconnected customer experience, and driving productivity resulted in record sales and net earnings for 2016,” Home Depot CEO Craig Menear said in a news release.
The company also forecast 2017 sales would rise 4.6% to $98.95 billion, topping analysts’ estimates of $98.45 billion.
“There really is a moat around the home improvement category that protects it from online competition,” Oppenheimer analyst Brian Nagel told CNBC. “The other big piece is … this is an area of demand growth within retail. People are spending on their homes.”