Home Depot (HD - Get Report) reversed earlier pre-market losses Thursday after it told investors that comparable sales for May, the first month of its fiscal second quarter, were far stronger than the previous period, helping to soothe some concerns over a rate revenue miss for the world's biggest home improvement retailer.
Home Depot shares had fallen as much as 3% in pre-market trading after it posted stronger-than-expected first quarter earnings but noted that same-store sales were hit by the colder winter temperatures that have also impacted activity in the key spring period.
Home Depot said earnings for the three months ending in April came in at $2.08 per share, topping the Street consensus of $2.05 and rising 24.6% from the same period last year. Group revenues rose 4.4% to 24.9 billion, narrowly missing the consensus forecast of $25.16 billion as same-store sales grew 4.2%. The Atlanta, Ga.-based retailer also confirmed its full-year sales guidance of 6.7% growth and a comparable same-store sales growth rate of 5%.
Group CFO Carol Tomé, however, told investors on a conference call that comparable sales for May were "double digit positive" and said transactions that were valued at over $900 each rose 10% in the first quarter.
Home Depot shares, a Dow Jones Industrial Average component, were marked 1.6% lower at $187.98 each in the opening minutes of trading, a move that tips the stock into negative territory for the year. The investor down draft also pulled Lowe's Companies Inc. LOW shares 1.33% lower from from Monday's close to $85.43 each.
"We are pleased by the strength of our business despite a slow start to the spring selling season," said CEO Craig Menear. "Outside of our seasonal business, we had solid results in all markets and categories and are seeing strong momentum in all lines of business during these first few weeks of May."
"These trends, as well as a favorable housing and macroeconomic backdrop, give us confidence to reaffirm our sales and earnings guidance for fiscal 2018. I would like to thank our associates for their hard work and continued dedication to our customers."