Home Depot sees continued tailwind from housing market recovery | Katonah Real Estate

Home Depot Inc. delivered again, and it still sees more tailwind from the housing market recovery.
Shares of the Atlanta-based home-improvement giant /quotes/zigman/229488/delayed/quotes/nls/hdHD on Tuesday rose 1.8% to $81.13, leading the Dow gainers, after the company reported a better-than-expected third-quarter profit, with comparable sales up 7.4%, including an 8.2% increase in the U.S., both exceeding estimates.

Better yet, it raised its full-year outlook and said it expects same-store sales to rise 7% for the year. That put it in contrast with industry counterparts like Wal-Mart /quotes/zigman/245476/delayed/quotes/nls/wmtWMT which gave investors a disappointing outlook.

While the company has benefited from Chief Executive Frank Blake’s efforts to make its businesses more efficient and to free employees from tedious tasks so they have more time to help customers, the company and its smaller rival Lowe’s Cos. /quotes/zigman/232508/delayed/quotes/nls/lowLOW have both benefited from a rebound in the housing market and pent-up demand for things like appliances, diverting money that might otherwise have been spent on apparel and other items. Lowe’s reports on Wednesday.

Ahead of the quarterly report, there had been increased concern that rising 30-year fixed rate mortgages, up a percentage point since May, would hurt home spending. Home prices, though still rising, have slowed down. But for now, investors can put those worries aside.

“New home construction is less important as a driver of our business than what is happening with the existing homes, both turnover and, most importantly, price appreciation,” Blake said on a call, responding to questions on whether management has observed any negative impact from mortgage rates or signs of a pullback in the housing market.



http://blogs.marketwatch.com/behindthestorefront/2013/11/19/home-depot-sees-continued-tailwind-from-housing-market-recovery/