The Home Depot Inc. (HD), the world’s largest home improvement retailer, released fourth-quarter fiscal 2014 results, wherein adjusted earnings of $1.00 a share came ahead of the Zacks Consensus Estimate of 89 cents. Moreover, the bottom line jumped nearly 37% from 73 cents a share earned in the year-ago quarter.
Driven by the ongoing strength in U.S. dollar, the company expects its fiscal 2015 sales and earnings to bear a negative impact of about $1 billion and 6 cents per share, respectively. As a result, sales are expected to increase in the range of 3.5%–4.7%, with comparable store sales growth of 3.3%–4.5%. Earnings per share is projected in the range of $5.11–$5.17, representing a growth of 8.5%–10%.
Earnings Estimate Revision: The Zacks Consensus Estimate remains stable in the last 60 days. However, Home Depot’s performance in fiscal 2014 remains encouraging. The company has posted positive earnings surprises of 2%, 5.6% and 1.8% in the first, second and third quarters of 2014, respectively. Moreover, the company delivered a positive earnings surprise of 12.4% in the quarter under review.
In the trailing four quarters, including the quarter under review, the company outperformed the Zacks Consensus Estimate by an average of 3.6%.
Revenues: Home Depot’s net sales increased 8.3% year over year to $19,162 million but surpassed the Zacks Consensus Estimate of $18,672 million. Comparable store sales increased 7.9%. The company’s results gained from strength across its stores, the recovering U.S. housing market and solid execution.
Key Events: Home Depot declared a 26% increase in its quarterly dividend to 59 cents per share, payable on Mar 26 to shareholders with record as on Mar 12. The company also authorized an $18.0 billion share repurchase program, in place of its existing authorization.
Zacks Rank: Currently, Home Depot carries a Zacks Rank #3 (Hold) which is subject to change following the earnings announcement.
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