By Nandita Bose and Aishwarya Venugopal
(Reuters) - Home Depot Inc (N:HD) exceeded analyst estimates for quarterly comparable-store sales on Tuesday, as consumers spent money on remodeling their homes amid a shaky U.S. housing market.
Shares of the retailer climbed 3.4 percent to $185.45 in premarket trading, after the retailer also raised its forecast for annual sales and profit ahead of the holiday shopping season.
Uncertainty over future home prices and a shortage of properties for sale have spurred homeowners and contractors to remodel homes instead of buying or building houses, spurring demand for Home Depot products.
"We believe (the results are) a testament to the overall strength of demand in the home improvement market," said Chief Executive Officer Craig Menear.
In August, Menear said homeowners were spending more as they viewed their homes as an investment rather than an expense.
Home price gains slowed further in August, a new sign that higher mortgage rates were weighing on housing demand.
Sales at U.S. Home Depot stores open for more than a year surged 5.4 percent during the third quarter ended Oct. 28, above analysts' expectations of a 4.38 percent increase, according to IBES data from Refinitiv.
The number of customer transactions at Home Depot stores rose 1.4 percent, while the average check increased 3.6 percent.
The Atlanta-based retailer now expects sales to rise 7.2 percent in the year ending January, compared with an earlier forecast of 7 percent growth. It raised its earnings forecast to $9.75 per share from $9.42 previously.
Home Depot's third-quarter net earnings rose to $2.87 billion, or $2.51 per share, from $2.17 billion, or $1.84 per share, a year earlier. That beat analysts' average estimate of $2.26 per share.
Net sales overall climbed 5.1 percent to $26.30 billion, edging past analysts' expectations for $26.26 billion.