Home Depot is reporting a $20.5 billion quarterly revenue for the third quarter of 2014, which is up from last year’s $19.5 billion. That news lifted stock prices from .95 cents a share to $1.15 a share in recent trading.
One of the reasons for the earnings increase comes from contractors. Like Lowe’s reported last week, Home Depot has significantly increased its revenue through working with contractors on a regular basis.
Home Depot’s CEO Craig Menear said sales from “high end pro customers” doubled the company’s average in the third quarter. Home Depot describes “high end pro customers” as those who spend more than $10,000 a year. “High end pro customers” make up about 13% of Home Depot’s contractor market.
The strength in the pro customer market translates into stronger demand for Home Depot products and services. Right now, the contractor market makes up approximately 35% of all sales at Home Depot. Last week, tED magazine reported the contractor market makes up about 30% of sales at Lowe’s.
But, all is still not perfect for Home Depot, as it still has a significant expense as the result of the massive data breach reported last September. Home Depot reported hackers stole information from 56 million payment cards customers used at the store over an extended period of time. A few weeks ago, Home Depot added to that report that the hackers also stole as many as 54 million e-mail addresses.
Home Depot believes its costs from the breach could easily reach $34 million. The costs will potentially include liabilities to payment card networks for reimbursements of credit card fraud and card re-issue costs, liabilities from current and future civil liabilities, government investigations and other potential costs. It adds that those costs will probably be reflected in Home Depot’s fourth quarter revenue results, and could have a severe adverse impact.
Tagged with earnings, financial, home depot, Lowe's, tED