Home Depot sales rise well above expectations and profit beats, but stock slips

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Shares of Home Depot Inc. slipped 0.9% in premarket trading Tuesday, although the home improvement retailer reported fiscal third-quarter profit that beat expectations and sales that rose well above forecasts, citing a “high-demand” environment amid the COVID-19 pandemic. Net income for the quarter to Nov. 1 rose to $3.43 billion, or $3.18 a share, from $2.77 billion, or $2.53 a share, in the year-ago period. The FactSet consensus for earnings per share was $3.18. Sales grew 23.2% to $33.54 billion, above the FactSet consensus of $31.83 billion. Overall same-store sales increased 24.1% to beat the FactSet consensus of 17.2% growth, while U.S. same-store sales rose 24.6% to beat expectations of 19.3%. “The third quarter was another exceptional quarter for The Home Depot as we saw the continuation of outsized demand for home improvement projects, which has led to sales growth of more than $15 billion through the first nine months of the year,” said Chief Executive Craig Menear. The stock has eased 3.0% over the past three months through Monday, but has rallied 28.0% year to date, while the SPDR S&P Retail ETF has climbed 21.8% this year and the Dow Jones Industrial Average has gained 7.6%.
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