Home Depot shines as warm winter helps sales

(Reuters) - Home Depot Inc's quarterly profit beat Wall Street estimates as a warm winter pulled some spring demand forward, boosting sales at the world's largest home improvement chain.

The retailer also gave a better-than expected profit outlook for the current year, just days after a report showed U.S. homebuilder sentiment rose to the highest level in more than four years in February. That report raised hopes that the housing market was stabilizing.

Home Depot shares rose 3.4 percent to $48.30 in premarket trading on Tuesday.

Home Depot's quarterly sales rose 5.9 percent to $16.01 billion, well ahead of the average analyst estimate of $15.51 billion compiled by Thomson Reuters I/B/E/S. Sales at stores open at least a year rose 5.7 percent globally, including a 6.1 percent rise in the United States.

Unusually warm temperatures in many parts of the country helped same-store sales by about 2 to 2.5 percentage points, Janney Capital Markets analyst David Strasser said, adding that demand was very strong for flooring products.

Besides the warm winter, Home Depot benefited from having more centralized distribution centers and from recent efforts to shift more employees to jobs where they serve customers directly. It has also been cutting costs more quickly than smaller rival Lowe's Cos Inc .

Lowe's is due to report its results next week.

Home Depot's net income rose to $774 million, or 50 cents a share, in the fourth quarter that ended on January 29, from $587 million, or 36 cents a share, a year earlier.

Analysts on average were expecting a profit of 42 cents a share.

For the current year, it anticipates earnings of about $2.79 a share, while analysts expected $2.77 a share.

"This guidance could be construed as not enough," Strasser said, but added that the company has a history of being conservative in its outlook.

(Reporting by Dhanya Skariachan; Editing by Lisa Von Ahn and Maureen Bavdek)