Home Depot surges in Q4, warns on dollar

Home Depot posted a better-than-expected fourth quarter performance, but warned that a strong dollar could hurt its results for the year.

The retailer posted an 8.3% increase in sales to $19.2 billion, and fourth quarter net earnings were up 36.1% to $1.38 billion. Same store sales for the quarter were positive 7.9%, and positive 8.9% for U.S. stores.

"We had a strong finish to the year, as strength across the store, the recovering U.S. housing market and solid execution aided our business in 2014," said Craig Menear, chairman, CEO and president. "I'd like to thank our associates for their hard work and commitment to our customers."

For the full year, net sales increased 5.5% to $83.176 billion. Net income for the fiscal year ended Feb. 1 increased 17.8% to $6.345 billion. Same store sales for the full year increased 5.3%, and increased 6.1% for U.S. stores. Looking ahead to fiscal 2015, the company forecast a slower pace to sales growth: about 3.5% to 4.7%. The company warned that it expects currency headwinds will impact 2015 earnings by about 6 cents per share.

The company’s much-publicized data breach continues to linger as a financial sore spot for the company. Home Depot cautioned that it is not able to estimate possible costs related to the breach. Costs might include reimbursement costs, card resistance, civil litigation and other legal action, the company said. To combat future thefts, the company said it has completed a project to encrypt credit-card data at the point of sale.

Home Depot, like its smaller rival Lowe’s, has been one of the main retail beneficiaries of the improving U.S. housing market as consumers pursue renovations and other projects. Earlier this month, the company said it would hire 80,000 workers for the spring and summer season this year, matching last year’s level.

During the past year, Home Depot stock has soared 44%, but has risen less than Lowe's 56% surge.

The retailer expects to open six new stores in 2015. As of Feb. 1, the company operated 2,269 stores.