Home Depot tops 4Q target
Warm weather lifts sales, profit more than forecasts at home improvement leader.
February 26, 2002: 9:10 a.m. ET
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NEW YORK (CNN/Money) - Home Depot Inc. posted improved fiscal fourth-quarter results that topped Wall Street expectations for the period and said it should be able to hit analysts' forecasts for the current quarter.
The largest home improvement retailer reported its biggest earnings gain since 1989, with net earnings rising 53 percent to $710 million, or 30 cents a share, in the quarter ended Feb. 3, from $465 million, or 20 cents a share, a year earlier. Analysts surveyed by earnings tracker First Call had forecast earnings per share of 28 cents.
Home Depot (HD: Research, Estimates) shares slid 56 cents to $51.51 in trading Tuesday.
The company said its results were helped by warm weather that extended the building season. It said it expects to meet the consensus First Call EPS forecast of 32 cents in the first quarter, which would be up from 27 cents a year ago.
Revenue rose 29 percent to $13.5 billion, topping both the First Call forecast of $12.6 billion and year-earlier sales of $10.5 billion. Sales at stores open at least a year, a closely watched retail measure known as same-store sales, gained 5 percent.
Results were helped by having a 14-week fiscal fourth quarter rather than the 13-weeks a year earlier. That extra week added about $880 million in revenue and about 3 cents a share in earnings in the latest period but did not affect the same-store sales comparison.
Home Depot is now the nation's second largest retailer, trailing only Wal-Mart Stores Inc. (WMT: up $1.45 to $62.10, Research, Estimates) in total sales. The Atlanta-based company reaffirmed twice during the course of the fourth quarter that it expected to meet analysts' guidance for the period.
Despite the slowing of the U.S. economy in the last half of last year, the demand for new homes has remained strong. New home permits and housing starts both came in well above expected levels in January.
Lowe's Companies Inc. (LOW: down $1.02 to $46.47, Research, Estimates), the No. 2 home improvement retailer behind Home Depot, reported better than expected fourth quarter results Monday, and raised its guidance for the coming year. 
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