Third-quarter revenues rose 15% over last year to $16.6 billion. Meanwhile, as net income grew 22% to $1.15 billion, EPS jumped 25% to $0.50 per share, reflecting $890 million in share repurchases. Wall Street had expected earnings of $0.46 per share on $16.15 billion in revenues.
But most importantly, same store sales increased 7.8%.
Back in January, the company unveiled its fix-it plan as the stock flirted with five-year lows. Same-store sales were declining, partially due to stiff competition from Lowe's and partially to internal problems. But after a tough 2002, it looks like Home Depot is back on track.
To improve efficiency, Home Depot installed self-checkout stations in 760 of its 1,643 stores by the end of the quarter. As a result, customer transactions grew 9.4% to 313 million, with more than 40 million of those transactions done through self-checkout. At the same time, the average ticket grew 4.9% to $52.10 -- the highest in history.
As Home Depot continues to position itself for growth, service business revenues grew 45%. Just last week, the company took another step in that direction, announcing the acquisition of privately held RMA Home Services, a company that specializes in the installation of replacement windows and siding.
The strong quarter led management to raise its full-year guidance for growth in EPS to between 15% and 17%. Lowe's exceptional performance is hard to ignore, and it probably is worth a premium to Home Depot. But the nation's second-largest retailer is showing that it's not done yet.