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Home Depot tops Street
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ATLANTA (AP) — Home Depot’s third-quarter profit rose 14 percent as comparable-store sales climbed in the U.S., suggesting that a huge data breach announced exactly two months ago has not shaken the faith of its customers.

The nation’s biggest home improvement retailer stuck to its outlook for all of 2014, but said that it could not account for all possible losses from a data breach it revealed in September that affected 56 million debit and credit cards. For now, the company is putting those costs at $28 million pretax for the most recent quarter, and $34 million as it pertains to its guidance for 2014.

Home Depot said Monday during a call with investors that it anticipates a fourth-quarter breach-related expense of about $27 million, but only about $6 million after insurance. The company has a $100 million insurance policy for breach-related expenses, according to Chief Financial Officer Carol Tome.

Accounting for all breach-related expenses, the company on Monday projected operating expenses this year to grow at about 27 percent of its overall sales growth rate.

For the three months ended Nov. 2, Home Depot earned $1.54 billion, or $1.15 per share. That compares with $1.35 billion, or 95 cents per share, a year earlier.

The housing sector had been hit hard early in the year by both bad weather and tight conditions in the market due to rising mortgage rates and a tight supply of homes.

That dragged down the earnings of home improvement retailers, yet Home Depot appears to be distancing itself from those early rough months, beating Wall Street’s per-share expectations by a couple cents, according to a poll of analysts by Zacks Investment Research.

“While we think the stock reaction will be relatively muted today, any significant weakness would make an even better buying opportunity as we remain comfortable in the longer term housing recovery thesis,” wrote Citigroup analyst Kate McShane.

Revenue for the Atlanta company climbed 5 percent to $20.52 billion from $19.47 billion. That also beat the $20.42 billion in revenue that analysts had expected.

Sales at stores open at least a year rose 5.2 percent. In the U.S., those sales increased 5.8 percent.

Same-store sales are a key gauge for investors because they exclude volatility from recently opened or closed locations, and provide a better look at a retailer’s core health.

Michael Lasser of UBS said comparable-store sales were relatively consistent month to month, suggesting that the data breach didn’t have much of an impact.

CEO Craig Menear said that online sales rose nearly 40 percent in the quarter, with increased traffic and more online orders being picked up in stores during the period.

Home Depot maintained its forecast for fiscal 2014 earnings of about $4.54 per share. It still expects sales to climb approximately 4.8 percent.

Analysts polled by FactSet predict full-year earnings of $4.51 per share.