With a roughly 32% increase in their 2012 Q4 earnings compared to Q4 in 2011, Home Depot is on the upswing again. According to a recent article on Forbes, this positive note is supported by the increase in new housing projects and the overall rebound of the housing market.
From the article:
“Home Depot’s results are primarily compared against Lowe’s, its key competitor and the second largest home improvement retailer in North America. The respective companies’ 2012 figures, however, show that Home Depot clearly comes out ahead. HD recorded comparable same-store sales growth of 7% during the final quarter and 4.6% for the full year. Compared to this, Lowe’s comparable same-store sales growth was below 2% for both the final quarter and the full year. HD’s full year sales growth stood at 6.2% compared to around 2.2% for Lowe’s – a clear sign that the company’s ability to address the US home improvement industry is only growing stronger. Investors have also maintained their confidence in HD’s ability throughout 2012 – the company’s stock has jumped by over 40% over the year.
The basic macro-level enablers for HD’s growth in the fourth quarter remained the U.S. housing market rebound – bringing along increased home occupancy rates, higher rates of home construction and spending as well as new home sales. A 5.6% increase in average ticket price during the final quarter also shows how buyers have been gradually moving towards bigger purchases – further confirming the general improvement in consumer confidence.”