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Profit for the third quarter at Home Depot topped estimates on Wall Street and the do-it-yourself home improvement retailer increased its forecast for full year earnings. That signaled confidence that the American public will continue spending money on their homes.
Profit increased per share to $1.60 during the quarter that ended October 30, said the company based in Atlanta on Tuesday. Analysts were expecting earnings of $1.58 per share.
The latest results show the largest chain of home improvement stores in the country continue to benefit from strong demand for supplies used to remodel homes, even as retail business in other sectors, slows down.
With values of homes continuing to increase, Americans see properties as an investment and continue to be more willing to fix them, which have continued to help revenue and profit at Home Depot.
Revenue at Home Depot was up 6.1% ending the quarter at $23.1 billion, which topped estimates by analysts of $23 billion. Sales at its stores opened for 13 months or more, a key metric for investors, increased by 5.5%, which beat estimates of 4.4% by analysts.
The strong quarterly results helped the company increase its profit forecast for its ongoing fiscal year to $6.32 per share, which was up from a projection previously of $6.30 per share.
Home Depot reconfirmed its revenue forecast of an increase during the year of 6.3%.
Home Depot increased in early trading to 1.8%. Shares of Home Depot have dropped 3.5% in 2016, through Monday’s stock market close. Its biggest rival Lowe’s, which will report its results Wednesday, has fallen by 7.9% during 2016.
Prices of homes have continued to rise at a pace of close to 5% for the past two years. The increase has been supported by a strong job market, increased wages and mortgages that continue to be low cost amidst a limited number of available homes, especially those at the cheaper end of the spectrum.
Data that an industry analyst released in October showed this same trend to be continuing with values increasing in 20 cities by over 5.1% during August.
That has helped to send more clients to Home Depot. Those customers are spending more when they arrive at Home Depots as the company had over 380 million transactions for the quarter, which was up 2.4% from the same quarter one year ago. The average purchase also increased by 3% to end that quarter at $59.78.