Encouraged by recent sales trends, Home Depot (NYSE:HD) on Wednesday upgraded its 2010 financial guidance and predicted sales will rise further in 2011.
The Atlanta-based home improvement retailer now expects 2010 sales to increase 2.3% and to post earnings per share of $1.97. Analysts polled by Thomson Reuters had been calling for 2010 EPS of just $1.94.
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Home Depot also predicted same-store sales will grow in the low single digits in 2011, translating to net sales growth of 2% to 2.5%. Earnings per share from continuing operations, before share repurchases, are expected to increase 7% to 9%.
Wall Street had been expecting earnings to rise by 14% to $2.22 a share and revenue to increase 2% to $69.17 billion.
Home Depot also said it anticipates moderate gross margin expansion in 2011.
“The Home Depot has a strong foundation of customer service, product authority and value creation. As we look to 2011 and beyond, we will continue to build on that foundation and deliver superior returns," CEO Frank Blake said in a statement.
Home Depot’s shareholders mostly yawned at the new guidance, send the shares lower by 0.7% to $33.32 ahead of Wednesday’s open. The stock has outperformed so far this year, rising more than 15% as of Tuesday’s close.