GEORGIA, United States

HOME Depot Inc’s second-quarter net income rose 14 per cent as shoppers picked up lawn and garden products and made storm-related repairs during the summer, the company said yesterday. The largest US home-improvement retailer also raised its earnings guidance.

The results sent Home Depot shares up five per cent in morning trading and are a positive sign that consumers are feeling slightly better about spending money to improve their homes. Purchases over US$900, which accounts for about 20 per cent of Home Depot’s revenue, rose 5.4 per cent during the quarter. Transactions under US$50 were flat.

“Our second-quarter results were driven by a rebound in our seasonal business, storm-related repairs and strength in our core categories,” said CEO Frank Blake.

He added that results were positive in the North, South and Western US, indicating a “stabilising environment across the country”.

The news came even as The Commerce Department reported that builders began work on a seasonally adjusted 604,000 homes last month, a 1.5 per cent decrease from June. That’s half the 1.2 million homes per year that economists say must be built to sustain a healthy housing market.

And the results stood in contrast to smaller rival Lowe’s, which a day earlier in part blamed bad weather for its flat second-quarter earnings and cut its revenue forecast. Its shares rose 15 cents to US$19.83.

Home Depot said it gained market share in several categories including flooring, plumbing, electrical lighting and kitchens.

Net income rose to US$1.36 billion, or 86 cents per share, during the three months ended July 31. That’s up from US$1.19 billion, or 72 cents per share, in the same period last year.

Analysts expected net income of 83 cents per share, according to FactSet.

Revenue rose four per cent to US$20.23 billion. Analysts predicted US$19.97 billion. Revenue in stores open at least a year, considered a key gauge of a retailer’s financial health because it excludes stores that open or close during the year, rose 4.3 per cent globally and 3.5 per cent in the US.

The results show a “really strong quarter”, said Janney Capital Markets analyst David Strasser in note to investors. Home Depot is “operating at a high level, taking chances where appropriate in merchandising, leveraging technology investments, and benefiting from a return to more localised marketing and merchandising in the store,” he added.

Home Depot said heatwaves as the quarter progressed drove sales of ceiling fans and refrigerators. Winter and spring storms and tornadoes helped fuel sales of roof, gutter and lawn repair products as well as cleaning supplies and water pumps.

Lowe’s had also said that repairs after storms helped results, but added that heat and drought hurt its results in the Gulf Coast.