How The Home Depot, Inc.(HD) Ended Up With Such a Great Performance?

The Home Depot, Inc. (NYSE:HD) came up with its second-quarter earnings report, which is much better than Street’s expectations. Peter Keith, Senior Analyst at Piper Jaffray  discussed The Home Depot, Inc. (NYSE:HD)’s growth across various geographies and other aspects of its results on CNBC, recently.

The Home Depot, Inc. (NYSE:HD)

“It’s really a solid quarter, above expectations. What was nice, is that it was strength across the board and that would be geography across categories and, I think, it really just well defines the strength of the management team and the power of solid execution. [...] I think to a certain degree it, certainly, wouldn’t be immune to a slowdown, but when you look down at the strength across categories, they are still doing a lot of work inside the store to optimize the space, you look at a category like appliances that they have sold for years and that was up double digits in the second quarter [...],” Keith said.

Keith mentions that he will be looking for The Home Depot, Inc. (NYSE:HD)’s out-performance in the overall housing space. The Home Depot, Inc. (NYSE:HD) surprised the Street when it announced second quarter sales of $23.8 billion, up 5.7% year on year and better than what analysts were expecting. The best part was the company’s comparable-store sales growth, which were higher 5.8%  overall and 6.4% higher for U.S. based stores. Net income of The Home Depot, Inc. (NYSE:HD) rose to $2.05 billion,  14%  more than the same quarter last year.

“[...] I think that there has been some concern about housing metric slowing for the last 12 months, which is fair, you have seen housing turnover slow and so you have seen the multiple compressed. You have not seen earnings come down, in fact earnings estimates have only gone up. So, as we look forward, I think, you are going to see the housing turnover number stabilize and you will see investors begin to come back to The Home Depot, Inc. (NYSE:HD) [...],” Keith added.

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