Home Depot Inc (NYSE: HD) in the first quarter of FY 17 has reported higher than expected quarterly profit and same-store sales, due to an increased customer traffic and more average spending at its stores amid a strong housing market. HD’s net income rose to $2.01 billion, in the first quarter ended April 30th, from $1.80 billion, a year earlier.

Home Depot in the first quarter of FY 17 has reported the adjusted earnings per share of $1.67, beating the analysts’ estimates for the adjusted earnings per share of $1.62. The company had reported the adjusted revenue growth of 5 percent to $23.89 billion in the first quarter of FY 17, beating the analysts’ estimates for revenue of $23.76 billion. The sales at stores open for more than a year grew 5.5 percent, above the 3.9 percent growth expected by analysts. The comparable sales at U.S. stores grew 6 percent. HD has reported rising sales as the housing market grows and Americans become increasingly willing to spend on home-improvement projects. The low mortgage rates have kept higher prices within reach of many borrowers and prices have increased in many U.S. housing markets over the past couple of years.

Moreover, the retail sales grew 0.4 percent last month after an upwardly revised 0.1 percent gain in March, due to the hefty gains in sales of building material, as per the U.S. Department of Commerce. This is in contrast to falling sales at department stores such as Macy’s Inc and J.C. Penney Co Inc, which are suffering from lower spending on apparel and growing competition from online and off-price retailers.

Home Depot and smaller rival Lowe’s Cos Inc have remained a bright spot in the retail sector as a firming economy and higher wages are leading to the new home sales and an increase in the value of existing houses has spurred remodeling activity by homeowners.

Additionally, Home Depot has raised its earnings forecast for the year ending January 2018, and expects the earnings per share to be in the range of $7.15 from $7.13, citing anticipated share repurchases. The analysts were expecting the earnings per share to be $7.20. HD has also reaffirmed its sales and comparable-store sales growth estimates of 4.6%.

Home Depot stock has risen 18.18% in the last one year (source: Google Finance). According to tipranks.com, 11 analysts has covered the stock while recommending a “Strong Buy”. HD has an average price target of $166.20, which is a further upside of 5.64%.