Home Depot (HD) raised its full-year earnings forecast after reporting a 6.6% rise in quarterly sales as customers spent more in a strong housing market.
Home Depot and smaller rival Lowe’s (LOW) have benefited as consumers cut back spending on items such as apparel and accessories and instead spend more on houses and renovating and redecorating their homes.
“Housing continues to be a tailwind for our business,” Home Depot Chief Executive Craig Menear said in a statement.
Low interest rates and a strengthening labor market are driving the housing sector. Home resales hit more than nine-year highs in May and June. July data will be released next week.
Sales at Home Depot stores open more than a year rose 4.7%, matching the average analysts’ estimate, according to research firm Consensus Metrix. Comparable sales at U.S. Stores rose 5.4%.
The company’s net income rose to $2.44 billion, or $1.97 per share, in the second quarter ended July 31 from $2.23 billion, or $1.73 per share, a year earlier.
Net sales of the world’s biggest home improvement chain rose to $26.47 billion from $24.83 billion.
Analysts on average had expected earnings of $1.97 per share on revenue of $26.49 billion, according to Thomson Reuters I/B/E/S.
The company said it now expected earnings of $6.31 per share for the year ending January, up from its previous forecast of $6.27.
Home Depot’s shares were slightly down in premarket trading. Up to Monday’s close of $137.06, its shares had risen 14.5% in the past year.