• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Editor's Pick Home Depot earnings beat Wall Street estimates as retailer breaks comparable sales losing streak
Editor's Pick

Home Depot earnings beat Wall Street estimates as retailer breaks comparable sales losing streak

by February 26, 2025
by February 26, 2025 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Home Depot on Tuesday topped Wall Street’s quarterly sales expectations, even as elevated interest rates and housing prices dampened consumer demand for large remodels and pricier projects.

For the full year ahead, the company said it expects total sales to grow by 2.8% and comparable sales, which take out the impact of one-time factors like store openings and calendar differences, to increase by about 1%. Home Depot projected adjusted earnings per share will decline about 2% compared with the prior year.

In an interview with CNBC, Chief Financial Officer Richard McPhail said “housing is still frozen by mortgage rates.” Yet he said Home Depot saw broad-based growth, as sales increased in about half of its merchandise categories and 15 of its 19 U.S. geographic regions.

Home Depot anticipates consumers will stop putting off projects as they gradually get used to higher interest rates, rather than waiting for them to fall, McPhail said. 

“They tell us their lives are moving on,” he said. “Their families are growing. They’re moving for a new job. They’re upsizing their home. They want to upgrade their standard of living. Home improvement always persists, and so the question, I think, will be around the mindset of whether long-term rates have gotten to a new normal.”

Here’s what the company reported for the fiscal fourth quarter compared with Wall Street’s estimates, according to a survey of analysts by LSEG:

Home Depot shares were up nearly 5% in midday trading. The company was holding an earnings call on Tuesday morning.

In the three-month period that ended Feb. 2, Home Depot’s net income climbed to $3.0 billion, or $3.02 per share, from $2.80 billion, or $2.82 per share, in the year-ago period. Revenue rose 14% from $34.79 billion in the year-ago period.

Comparable sales, a metric also known as same-store sales, increased 0.8% across the company. Those results ended eight consecutive quarters of falling comparable sales. They also exceeded analysts’ expectations of a decline of 1.7%, according to StreetAccount. Comparable sales in the U.S. increased 1.3% year over year.

Regions hit by hurricanes Helene and Milton contributed about 0.6% to comparable sales, McPhail said.

Customers spent more and visited Home Depot’s stores and website more in the quarter compared with the year-ago period. Transactions rose to 400.4 million, up nearly 8% from the year-ago period. The average ticket was $89.11 in the quarter, up slightly from $88.87 in the prior-year quarter.

Home Depot has faced a more difficult backdrop for selling supplies for home improvement projects. Sales growth slowed in 2023, after consumers’ huge appetite for home renovations during the Covid pandemic returned to more typical patterns. Inflation and a shift back to spending on services like vacations and restaurants also dinged consumer demand for larger projects and pricier items.

Since roughly the middle of 2023, Home Depot’s leaders have pinned the company’s problems on a tougher housing market. McPhail told CNBC that the same challenge persisted in the fourth quarter, as consumers still showed reluctance to splurge on bigger projects, such as redoing a kitchen or installing new flooring.

Mortgage rates have remained high, despite interest rate cuts by the Federal Reserve. The median price of a home sold in January was $396,900, up 4.8% from the year before and the highest price ever for the month of January, according to the National Association of Realtors.

Tougher weather also hurt the company’s sales in January, and that’s carried into February in some parts of the country, McPhail said.

“Where weather is good, we continue to see engagement,” he said. “Where weather is tough, projects get put on the shelf.”

Even so, he said Home Depot has focused on ways it can move the needle, such as opening new stores and investing in its e-commerce business. 

Online sales rose 9% in the fourth quarter compared with the year-ago period, McPhail said, the strongest quarter of the year for Home Depot’s digital business. He chalked that up to the company’s investments in faster deliveries, particularly with getting appliances and power tools to customers.

McPhail said Home Depot opened 12 new stores in 2024, and it plans to open 13 new locations in the coming year. 

Home Depot has also looked to home professionals as one of its major sales drivers. It bought SRS Distribution, a Texas-based company that sells supplies to professionals in the roofing, pool and landscaping businesses, for $18.25 billion last year. It marked the largest acquisition in the company’s history.

Some pro-heavy categories, such as roofing, drywall and lumber, saw sales increases in the quarter because of Home Depot’s push to serve contractors and other home pros better, McPhail said.

Shares of Home Depot closed Monday at $382.42. As of Monday’s close, the company’s shares have fallen about 2% so far this year. That trails behind the S&P 500′s approximately 2% gains during the same period.

This post appeared first on NBC NEWS
You Might Also Like
  • UAW challenges Mercedes-Benz union vote, asks NLRB for new election
  • NFL owners vote in favor of private equity investment
  • Biden administration bans noncompete agreements, setting up legal showdown with business groups
  • Holiday shopping season might be off to a slow start
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Decode the Stock Market’s Health With This Key Indicator
next post
Bearish Signals & Risk Management: Protect Your Portfolio!

You may also like

Electric air taxi maker Archer Aviation gets key FAA sign-off

June 6, 2024

Big banks have drastically cut overdraft fees, but customers still...

February 12, 2024

Moody’s cuts outlook on U.S. banking system to negative from...

March 16, 2023

The Fed may soon cut interest rates. That could make...

July 11, 2024

AI startups are snatching up San Francisco offices, using Zoom...

December 8, 2024

First Citizens Bank to buy Silicon Valley Bank deposits and...

March 29, 2023

Google says U.S. is facing a power capacity crisis in...

February 12, 2025

Consumers are not lovin’ it: McDonald’s has its worst quarter...

May 1, 2025

The first Fed interest rate cut in years is on...

July 30, 2024

How the Olympics helped transform Salt Lake City into a...

December 11, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout, pulls outlook

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025
    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,632 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,186 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout,...

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    S&P 500, Nasdaq close at all-time...

    July 10, 2024

    Surging grocery prices have settled down,...

    August 15, 2024

    UPS workers vote to authorize strike...

    June 21, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here