CHICAGO — Home Depot posted a 44 percent increase in its first-quarter profit Tuesday but didn’t live up to the market’s high expectations a day after rival Lowe’s boosted its full-year outlook.
The volatile housing market continued to drag down revenue and hurt business in states with the highest foreclosure rates, Home Depot said — taking a decidedly less optimistic view than its chief competitor, whose results Monday helped lead a market rally.
“Getting to ‘less bad’ is not the same as getting to recovery,” chairman and chief executive Frank Blake said on a conference call.
Investors saw Lowe’s as the winner of the quarterly duel, thanks to its higher sales at established stores and better gross margins — meaning it made more profit off the goods it sold as it cut costs.
While Lowe’s usually gets more favorable ratings from female shoppers, Home Depot is more likely to be favored by men and contractors — a group that finds itself with much less business because of the economy and the troubled housing market.
Home Depot earned $514 million, or 30 cents per share, for the three months that ended May 3, up from $356 million, or 21 cents per share, a year ago. Adjusted profit, which excludes results from the now-closed Expo business, was 35 cents per share. Home Depot announced in January that it planned to shutter its 34 Expo Design Centers.
Analysts polled by Thomson Reuters, who generally exclude one-time items, expected a profit of 29 cents per share. Sales for the quarter fell 10 percent to $16.18 billion.
Corporate Earnings
Hewlett-Packard
The computer and printer maker said quarterly profit dropped 17 percent as sales of personal computers and printer ink slumped. The numbers were in line with Wall Street’s forecasts.
HP earned $1.72 billion, or 70 cents per share. Excluding restructuring and other one-time charges, HP earned 86 cents per share, which matched the average forecast of analysts polled by Thomson Reuters.
Sales fell 3 percent to $27.4 billion, which matched analyst estimates.
Medtronic
The medical-device maker said Tuesday it would cut up to 1,800 employees after its fiscal fourth-quarter net plunged 69 percent on slipping sales, restructuring and other charges.
Its adjusted earnings matched Wall Street expectations, but shares fell after the company offered disappointing sales guidance and announced the layoffs.
Medtronic said it earned $250 million, or 22 cents per share, in the three months ended April 24, down from $812 million, or 72 cents per share, a year earlier.
Revenue slipped 1 percent to $3.83 billion.
Saks
The luxury retailer reported a loss for the first quarter Tuesday as it struggles with the pullback in spending by its wealthy customers. Still, the results beat analysts’ expectations as the chain benefited from cost cuts.
Saks said it lost $5.1 million, or 4 cents per share, in the first quarter ended May 2. That compares with a profit of $17.3 million, or 12 cents per share, a year earlier.
Revenue fell 27 percent to $621.3 million, from $850 million a year earlier.
Sales at stores open at least a year, known as same-store sales, dropped almost 28 percent.
Analysts were expecting a loss of 26 cents per share on revenue of nearly $620 million.
TJX
The discount retailer said Tuesday that its fiscal first-quarter profit rose 8 percent as budget-conscious shoppers taking advantage of bargains at its outlets helped boost sales.
TJX said earnings climbed to $209.2 million, or 49 cents per share, for the period ended May 2, up from $193.8 million, or 43 cents per share, a year ago.
The latest results met the expectations of analysts polled by Thomson Reuters.
Sales edged up 1 percent to $4.35 billion from $4.3 billion.
