Home Depot (HD 191.80, +4.83) has climbed 2.6% in pre-market after beating earnings expectations and boosting its dividend.
The specialty retailer reported above-consensus fourth quarter earnings of $1.69 per share on a 7.5% year-over-year increase in revenue to $23.88 billion, which was just ahead of estimates. Home Depot's fourth quarter earnings excluded a charge of $0.17/share associated with tax reform.
Comparable store sales increased 7.5% year-over-year while comparable sales at U.S. stores increased 7.2%. For the full year, comparable store sales grew 6.8% while comparable sales at U.S. stores rose 6.9%. Gross margin declined to 33.89% from 34.01% one year ago.
Customer transactions grew 2.0% year-over-year to 366.50 million while average ticket increased 5.5% to $64.00 per customer.
In addition to beating earnings expectations, Home Depot raised its quarterly dividend 16.0% to $1.03 per share.
Looking ahead, Home Depot expects that revenue for fiscal year 2019 will be close to $107.46 billion while earnings will reach $9.31 per share. Comparable store sales are expected to increase 5.0% through the first 52 weeks of the year while the 53rd week is expected to add $1.60 billion to total sales. The company plans to open three new stores and expects that its gross margin will reach 34.0%.
Looking farther out, Home Depot reaffirmed its target for total annual sales between $115 billion and $120 billion by 2020. This implies a compound annual sales growth rate between 4.5% and 6.0%.