A natural disaster and more home construction in Florida, California and Arizona — three of the hardest hit states during the recession — helped boost Home Depot’s profit and sales in the fourth quarter of 2012.
The Atlanta-based home improvement giant said Tuesday that fourth quarter sales rose 13.9 percent to as Northeast residents shopped stores to rebuild their houses after Hurricane Sandy, holiday spending grew and business picked up among the tradespeople who remodel kitchens, basements and other places.
“It’s very encouraging for us to see the comeback,” said Carol Tome, the company’s chief financial officer.
Profit jumped to $1 billion for the quarter, from $774 million a year earlier.
Business from Hurricane Sandy is expected for at least the three more months. Home Depot’s sales created by Hurricane Irene reached $360 million in 2011 and the company expects about the same from Sandy, Tome said.
But Home Depot sounded a note of caution. While business continues to improve, it will be affected by slow GDP growth and smaller consumer paychecks as a result of the end of the payroll tax holiday. Banks continue to keep lending tight.
“We think it is best to plan and structure our business on the assumption of a modest recovery and then adjust if and when the opportunities or challenges arise, as we have previously,” Home Depot Chief Executive Officer Frank Blake said.
The company pointed out that some of the uptick stemmed from an additional week of earnings in the fourth quarter of 2012 .
Home Depot will raise its fourth quarter dividend by 34 percent to 39 cents a share. The dividend is payable on March 28 to shareholders of record on March 14 of this year.