Home Depot said Thursday that Craig Menear, the president of its U.S. retail operations, will become president and CEO of the company Nov. 1.
Frank Blake has been Home Depot's chairman and CEO since 2007, and he will remain chairman of the company. Menear, 57, became president of the company's U.S. retail unit in February and the company said the move was part of a planned succession.
Menear has worked for Home Depot since 1997, and the company said he helped revamp its merchandising operations, strategy, and supply chain as well as bolstering sales growth for Home Depot's website. He has also worked for Ikea, Builders Emporium, and Montgomery Ward.
"This has been well-telegraphed. Craig was being groomed for the position," said Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors. "They have a lot of confidence in the holiday season and they want to give him the experience of being the top dog."
Home Depot Inc. is the largest U.S. home improvement retailer. On Tuesday, the company reported strong second-quarter results and raised its profit forecast for the full year. It said purchases of major items like appliances and water heaters improved compared to last year, and its results have been helped by the improving U.S. housing market. Home prices are starting to rise, job growth has been steady, and there are fewer troubled loans dating back to the days of the housing bubble.
Home construction also bounced back in July, and applications for building permits improved after falling in May and June. While the housing market recovery has been uneven, home owners are spending more money on renovations.
The Atlanta company on Tuesday raised its outlook for the year, saying it expects to earn $4.52 per share, up from its previous estimate of $4.42 per share. Analysts are expecting $4.48 a share, according to FactSet.
For the three months ended Aug. 3, Home Depot Inc. earned $2.05 billion, or $1.52 per share. A year earlier it earned $1.8 billion, or $1.24 per share.
Analysts surveyed by Zacks Investment Research predicted earnings of $1.44 per share.
Home Depot's stock gained $2.53, or 3 percent, to $86.12 before the market open.
Revenue climbed nearly 6 percent to $23.81 billion from $22.52 billion. This beat Wall Street's forecast of $23.57 billion.
Sales at stores open at least a year, a key gauge of a retailer's health, rose 5.8 percent. In the U.S., the metric increased 6.4 percent.
Sales at stores open at least a year excludes results from stores recently opened or closed.
Aside from the better weather, Home Depot has been helped of late by an improving U.S. housing market. Home prices have started to rise, and there's been steady job growth and fewer troubled loans dating back to the housing-bubble days. While the housing market has recently had a bit of trouble maintaining that momentum, many home owners are spending more to renovate their homes.
Under Blake, the company responded to the housing market crash by cutting back on its expansion plans, saying it would build fewer stores in better locations instead. During the tenure of Bob Nardelli the company expanded at a faster clip in order to gain market share.