Home Depot Sets $18B Buyback, Profit Beats Estimates

Home Depot Inc (NYSE:HD), the world's No. 1 home improvement chain, posted a better-than-expected rise in quarterly same-store sales on Tuesday but the company warned that a strong dollar will likely hurt 2015 earnings.

Chairman and Chief Executive Craig Menear said if the U.S. dollar stays at current levels the company expects a negative impact of $1 billion to 2015 sales growth and a hit to earnings of 6 cents a share for the year.

Home Depot shares were up 3 percent at $115.67 in midmorning after rising as much as 5 percent.

Profit beat expectations as an improving job market encouraged Americans to spend more on renovations. Earlier on Tuesday, luxury home builder Toll Brothers Inc <TOL.N> reported a higher-than-expected quarterly profit and raised the low end of its full-year home delivery forecast as housing demand strengthened.

U.S. homebuilders remain upbeat about market conditions, according to a survey by the National Association of Home Builders published last week.

Home Depot also said it would buy back $18 billion of its shares, replacing a $17 billion buyback authorized in 2013.

The company said it expects full-year 2015 earnings of $5.11 to $5.17 per share, after accounting for share buybacks and sales growth of 3.5 to 4.7 percent.

But its fiscal 2015 earnings guidance does not include an accrual for losses related to last year's data breach, which may include liabilities to payment card networks for reimbursements of card fraud costs.

Home Depot's data systems were breached between April and September, when hackers stole about 56 million payment cards. The company said net costs related to the breach are pegged at $33 million so far.

Home Depot's same-store sales rose 7.9 percent in the fiscal fourth quarter ended Feb. 1, beating the average analyst estimate of 5.5 percent, according to research firm Consensus Metrix.

Comparable sales increased 8.9 percent in the United States, where Home Depot has more than 85 percent of its 2,269 stores.

Net income rose 36 percent to $1.38 billion, or $1.05 per share, in the quarter. Excluding items, the company earned $1.00 per share.

Net sales rose 8.3 percent to $19.16 billion.

Analysts on average had expected earnings of 89 cents per share on revenue of $18.7 billion, according to Thomson Reuters I/B/E/S.

Home Depot also raised its quarterly dividend to 59 cents per share from 47.

(Reporting by Nandita Bose in Chicago and Siddharth Cavale in Bengaluru; editing by Savio D'Souza and Matthew Lewis)