NEW YORK (AP) - Home Depot Inc.'s third-quarter net income rose 12 percent as consumers spent a bit more on home-improvement projects and repaired their homes after Hurricane Irene
The No. 1 U.S. home-improvement retailer's results announced Tuesday beat expectations and the company raised its 2011 earnings outlook and its dividend.
Home-goods sellers are facing cautious consumer spending and a prolonged weak housing market. They've had to adjust to fewer consumers making large-scale home renovations by cutting costs and improving services such as online shopping and customer service.
Atlanta-based Home Depot's smaller rival Lowe's Cos. reported Monday its third-quarter net income fell 44 percent on restructuring costs as it closes stores. Lowe's CEO Robert Niblock said Monday he didn't expect any significant rebound in the housing market until 2013.
Home Depot CEO Frank Blake echoed that sentiment.
"In the U.S., we still do not see, and do not expect to see in the near term, any meaningful tailwind from the housing market," Blake said in a call with analysts. "In this type of environment, it is critical that we effectively invest in our business and keep focused on customer service."
Some examples of Home Depot's investments are a new "buy online, pick up in store" program, a new scheduling system for staffers and a new return-to-vendor process.
Home Depot said consumers are spending slightly more on their homes. Storm-related repairs helped results after Hurricane Irene swept up the East Coast in August. But spending was up in all regions. Blake said the Western division, which was not affected by the hurricane, was the strongest region.
The number of customers making purchases rose 1 percent, the third sequential quarterly increase. The average ticket rose 3 percent to $53.03. Products related to smaller maintenance and repair categories like pipes and fittings, hand tools and appliance parts sold well.
The number of customers buying items worth $50 or less was flat for the quarter, while customers spending over $900 rose 3.6 percent, helped by sales of roofing and generators.
Net income in the quarter ending Oct. 30 rose 12 percent to $934 million, or 60 cents per share, from $834 million, or 51 cents per share, last year.
Revenue rose 4 percent to $17.33 billion from $16.6 billion last year.
Analysts polled by FactSet expected earnings of 59 cents per share on revenue of $17.11 billion.
Revenue in stores open at least a year rose 4.2 percent globally and 3.8 percent in the U.S. The measure is considered a key gauge of a retailer's fiscal health because it excludes stores that open or close during the year.
The measure shows "Home Depot continues to capture share in a challenging macro-environment," said S&P Capital IQ analyst Michael Souers.
The company now expects net income of $2.38 per share for the year, from August guidance of $2.34 per share. It reiterated it expects revenue to rise 2.5 percent, implying revenue of $69.7 billion. Analysts expect earnings of $2.36 per share on revenue of $69.66 billion.
For the holidays, Home Depot has expanded its LED Christmas light selection to 70 different options and is offering new Martha Stewart holiday dicor. Gift centers will showcase hand tools, power tools and tool storage items.
Home Depot also raised its dividend to by 4 cents to 29 cents. The dividend is payable on Dec. 15 to shareholders of record as of Dec. 1.