Dow component Home Depot (HD 145.90, +2.90) is set to begin at a fresh record high after beating quarterly expectations and boosting its dividend and buyback.
Home Depot has been able to withstand a weak retail environment better than most other consumer companies. The company's full year sales increased 6.9% year-over-year, allowing the stock to ascend to a fresh record high.
As for the fourth quarter, the home improvement retailer reported above-consensus earnings of $1.44 per share on a 5.8% year-over-year increase in revenue to $22.21 billion, which also exceeded expectations.
Fourth quarter comparable store sales increased 5.8% year-over-year while comparable store sales in the US increased 6.3% year-over-year. The comparable store sales growth rate is expected to slow to about 4.6% for fiscal year 2017.
Gross margin was little changed, ticking down nine basis points year-over-year to 34.0%.
Operating income grew 14.8% year-over-year to $2.93 billion, which was mostly due to cost control efforts, as total operating expenses ticked up just 0.4% year-over-year.
Customer transactions increased 2.9% during the fourth quarter, matching the 2.9% increase in average ticket ($60.65).
Home Depot issued guidance for fiscal year 2018, priming the market for full year earnings of $7.13 per share, which is a bit shy of current market expectations. However, the company's revenue guidance for sales of about $98.95 billion is ahead of current market expectations.
Home Depot's Board of Directors authorized a $15 billion share repurchase program and increased its quarterly dividend 29.0% to $0.89 per share.
In addition to lifting Home Depot, the company's solid quarterly report has given a pre-market boost to the shares of Lowe's (LOW 77.40, +0.66). Lowe's will report its fourth quarter results on Wednesday, March 1.