Home Depot’s pro sales grew faster than in its consumer segment for the first time since 2008 during the first quarter ended May 5, company officials told analysts in a call Tuesday, crediting an improving housing market offset in part by a stronger winter than a year earlier.
“A lot of the smaller pros basically shut their business down and started to work for the larger pros,” said Marvin Ellison, the company’s executive vice president of U.S. stores. “As the market improves … a lot of the smaller pros are venturing out.”
The home improvement retailer’s earnings climbed 18.5% to $1.23 billion as sales rose 7.4% to $19.12 billion. Gross margins of 34.9% during the quarter compare with 34.7% a year earlier. Tickets valuing more than $900 rose 9.7% during the period from a year earlier, driven largely by strong appliance sales and higher wood prices.
Garden sales 12 percentage points below normal drove down the value of smaller tickets, the company said, although it expects much of that activity to be realized in the second quarter. The company also expects to do about $145-million worth of sales during the second quarter related to repair and recovery work related to Hurricane Sandy.
“While not back to historical norms, we’re seeing improvement in unit production and the number of items in a basket for our pro customer,” said Craig Menear, executive vice president of merchandising.
Interfor’s acquisition of Rayonier in the first quarter ended March 31 joined strong wood-product prices and the company’s own increasing mill activity to grow adjusted EBITDA to $37.1 million during the period compared to $7 million a year earlier. This, as sales rose nearly 30% from the first quarter of 2012 to $242.5 million. First-quarter lumber segment sales increased 43.3% to $191.4 million year over year as the company posted its highest production levels on record at 390 million board feet, up 20.7% for the same period.
Ainsworth credited a 70% increase in realized pricing for its year-over-year first-quarter sales increase of 66.6% to $141.8 million, which pushed adjusted EBITDA to $62.5 million from $9.6 million a year earlier. The increase grew margins to 44.1% during the period, which ended March 31, compared to 11.3% a year earlier. Production volumes were up 1.8% to 408.1 million board feet from the first quarter of 2012 while shipments were down by about the same percentage.
Eagle Materials posted steady fourth-quarter and annual gains in its gypsum business thanks to higher wallboard prices and volumes for the periods ended March 31. The company reported segment operating earnings up 76.2% for the quarter to $26.6 million from the year-earlier period while tripling to $94.9 million for the year. Segment sales rose 19.7% to $95.6 million during the quarter and 29.1% to $382 million for the year.
Masonite deepened its loss to $5.8 million in the first quarter ended March 31 from a loss of $1.9 million a year earlier as sales rose 6.1% to $424.5 million during the same period. The entry door systems maker posted first-quarter adjusted EBITDA of $26.2 million, one-third higher than a year earlier, noting that the impact of an accelerating housing recovery was offset in quarter- and year-end comparisons by a winter less mild than that of 2012.
Ply Gem, which last week raised the value of its proposed IPO from $300 million to $363 million, said first-quarter weather less favorable to repair and remodel work compared to that of the year-earlier quarter caused adjusted EBTIDA to drop to $11.8 million in the first quarter of FY 2013, ended March 30, compared to $14.9 million in the first quarter of FY 2012. Quarterly sales rose 7.5% to $257.1 million.