The company's adjusted earnings per share not only topped analysts' expectations, but the retailer reaffirmed its full-year sales guidance and raised its 2016 full-year EPS forecast.
While some analysts had suggested that Home Depot may be overwhelmed by Amazon' (AMZN) growing retail success, fiscal third-quarter results from Home Depot established its ability to withstand the e-commerce wave and hold on to its position.
These two key factors explain why Home Depot is a well-diversified retail giant with the capacity increase its share price in the foreseeable future.
1. Home Depot's Unique Product Proposition
Key metrics for the home improvement segment indicates a strong consumer affinity for store visits and purchases. It's one thing to buy a book, sweater or video game online; it's another to buy lumber, large power tools or kitchen cabinetry.
In October, for the industry as a whole, building material and garden equipment sales improved 1.1% month on month and 6.5% year on year.
In the wake of Hurricane Matthew, reconstruction costs could probably come in the range of $54 billion, as per one report. Home reconstruction and improvement bills should be substantial, propelling Home Depot's and Lowe's earnings.
Home Depot reported comparable-store sales growth of 5.5% for its third quarter, easily besting Wall Street's estimates for a 4.4% increase.
The comparable-store sales for the U.S. were up 5.9%. The sales figures were not fueled by cheap products or discounting, which is probably why the gross margin was constant at 34.7%.