Home Depot Beats Expectations With Record $28.11 Billion In Quarter

Home Depot Inc HD took in $28.11 billion in revenues in the second quarter, beating market expectations and recording its biggest quarterly haul in its history, which a Credit Suisse analyst said justifies the home-supply company’s premium valuation.

“These results represent some of the best results in retail, which justifies HD’s premium valuation, in our view,” said Seth Sigman in a note. "The market should be pleased with +6.6% comps, though the lower flow through this quarter may give some initial pause until the call (even if consistent with prior guidance)."

Related Link: Analysts Build Their Expectations For Home Depot, Lowe’s Earnings

Comps Growth Healthy

He rated Home Depot at Outperform and set a price target of $171.

Same-store sales climbed 6.3 percent, better than the expected 5-percent growth.

“We believe that reflects strength in big ticket and larger projects, progress with its own Pro related initiatives, along with healthy seasonal trends (helping drive the improvement in transactions vs. last quarter),” he said (see his track record here).

“That reflects higher planned store investments in Q2, which is expected to moderate in 2H, supporting better flow through. Key on the call will be the discussion on comps guidance (which assumes no change vs. prior 2H comps guidance in +4.6 percent range), any indications on August trends, the potential for margin expansion in 2H and stronger EPS growth.”

At time of publication, shares of Home Depot were down 3.35 percent at $149.09.