Anteile von Home Depot Premarket trades Tuesday saw a nearly 44% increase in (NYSE:) shares after the company announced better-than-expected Q1 comparable sales.

In the third quarter net sales reached $38.91 billion, which was 3.8% higher YoY than consensus estimates at $36.83 trillion. HD posted a $4.09 increase in net sales from the previous year, which was up 3.8% YoY and above the $3.86 per share estimate.

Analysts expected to see a drop of 2.2% in comparable sales, but the 2.2% increase was 31% YoY. The U.S. sales of comparable products rose 1.7% in the quarter, an increase of 29.9% YoY. This beats the predicted decline by 1.75%. The average ticket sale was $91.72, an increase of 11% over the previous year.

HD anticipates EPS growth of the low single digits for the entire fiscal 2023. This is in contrast to the previous forecast that saw EPS growth in high-single digits. Similar sales will rise by roughly 3 percent, compared to 1.45% as previously anticipated.

FY operating margin is expected to be around 15.4%, compared to its “approximately flat” earlier forecast.

“The solid performance in the quarter is even more impressive as we were comparing against last year’s historic growth and faced a slower start to spring this year,” the company said.

Telsey Advisory Group analyst Joseph Feldman said HD delivered a “strong start to 2022.”

“Home Depot reported a strong 1Q22, with a better-than-expected comp of 2.2%, reflecting solid home improvement demand, supported by elevated home prices, healthy remodeling activity, and solid household formation. Home Depot should remain a winner in retail, given its best-in-class execution, digital prowess, and permanent and hybrid work-from-home arrangements causing more maintenance and repair activity,” Feldman said in a client note.

Goldman Sachs Kate McShane extended a Buy rating to HD stock and set a target price of $356.00 per share.

“HD’s 1Q22 results were unexpectedly strong in light of several macro headwinds facing home improvement retailers, including a slowing housing market, a potentially weaker consumer, and weaker weather to start the spring selling season. With inflation in raw material, freight, labor, and energy costs seeming to persist across the housing names (based on our vendor read-throughs), it is particularly notable that HD was able to generate a gross/operating margin beat vs. consensus in conjunction with the strong top-line result,” McShane said in a client note.

By Senad Karaahmetovic