NEW YORK (TheStreet) -- It's been tough sledding for several retailers this earnings season, especially those showing chinks in their armor by offering weak business outlooks. That's not what investors want at a time when pundits are calling for a 10% market correction at every opportunity.
Although shares of HD Supply Holdings (HDS) aren't cheap, trading at near record highs and up more than 12% on the year, it would be a colossal mistake to part with this winner ahead of its fiscal first-quarter earnings results Tuesday due out before the opening bell.
HD Supply, an industrial products supplier, was spun out of Home Depot (HD) in 2007 and went public in June 2013. The company, based in Atlanta, has been a solid operator, posting six consecutive quarters of earnings beats. During that span, only once has HDS missed Wall Street's revenue targets.
The company, whose shares have skyrocketed more than 60% since its initial public offering, continues to benefit from a rebound in both residential and commercial construction, which is driving growth in all four of its major business segments. But it's not just about revenue growth.
Although HDS is relatively new as a public issue, the company's mindset remains on profitability, as evidenced by the continued uptrend in its gross profit margins, which has climbed steadily by an average of 10 basis points in each of the past three quarters.
What do you get for this performance? Aside from a stock, that's up almost 80% in the past three years, almost doubling the 42% gains in the Dow Jones Industrial Average (DOW), you get a company that is already one of the largest industrial distributors in the U.S. with annual sales of $8.5 billion.