The Home Depot, Inc. ((NYSE:HD), the world’s largest home improvement retailer, today announced Q1 2014 financial results. In connection with this, Frank Blake, the company’s CEO discussed the earnings results in more detail in a conference call conducted earlier today. Below is the full commentary by the CEO…
Thank you, Diane, and good morning everyone. Sales for the first quarter were $19.7 billion, up 2.9% from last year. Comp sales were positive 2.6% and our diluted earnings per share were a dollar. Our U.S. stores had a positive comp of 3.3%.
Our sales for the quarter were below our expectations. In 2013, we experienced a delayed spring in the U.S. and Canada and we expected more normal weather for this spring. Instead, much of the U.S. and Canada had an even colder spring and this had a significant impact on our sales.
In previous years, we’ve talked about the bathtub effect that weather can have on our spring seasonal business, where weak sales in the first quarter are counterbalanced by strength in the seasonal business in the second quarter. We expect the same effect to be true this year.
As we look at the performance of our business in the first quarter, the strength in the areas of the country where more normal weather existed supports this outlook.
In the U.S., as Craig will discuss, our northern division, our largest division negatively comped, driven by weakness in seasonal and outdoor categories, but in our southern and western divisions we not only positive comped, but we actually did better than we expected.
There has been a fair amount of discussion about the fact that many indicators in the housing market have softened over the last several months, leading to the question of whether this indicates that the housing recovery has run out of steam. As we parsed the data from our own business, that is not what we see.
The core categories in the store remained strong, pro-sales continued to grow. Our services business grew high single-digits in the quarter and we had another quarter of big ticket growth. And our fundamental view on the recovery and the home improvement market has not changed. We didn’t expect the recovery in 2014 to be as dramatic as last year’s, but we continue to believe that home price appreciation, affordability and an aging housing stock in need of investment will continue to drive growth.