$Home Depot(HD)$ is scheduled to release its fiscal Q1 2025 earnings before the market opens on Tuesday, May 20, 2025.
EPS Forecast: The consensus EPS forecast based on analysts' estimates is around $3.59. This is slightly lower than the $3.63 reported for the same quarter last year, representing an expected year-over-year decrease of approximately 1.1%.
Revenue: While a specific revenue consensus for Q1 2025 is not as prominently featured in the immediate search results, it is implied that analysts will be looking for performance relative to previous trends and any guidance the company might have offered in prior communications.
Comparable Sales: This will be a closely watched metric, indicating the health of Home Depot's core retail operations. Any insights into customer traffic, average ticket size, and regional performance will be valuable.
Home Depot (HD) Last Neutral Earnings Call Saw Share Price Declined A Modest 0.90%
The earnings call presented a balanced view of Home Depot's performance, highlighting impressive sales growth and strategic expansion efforts, including the successful integration of SRS and new store openings. However, this is offset by challenges in the broader economic environment, particularly the impact of high interest rates on larger projects and a decline in comp sales and earnings per share. Despite these challenges, there is a strong focus on strategic investments and market share growth.
Here is the recent performance and context which might be able to shed some lights on how HD would be doing movement forward.
Fiscal Year 2024 Results (Reported February 2025): For the full fiscal year 2024, Home Depot reported sales of $159.5 billion, a 4.5% increase from the previous year. However, comparable sales decreased by 1.8%. Diluted EPS for the year was $14.91.
Q4 2024 Performance: In the fourth quarter of fiscal 2024, Home Depot's results exceeded expectations, with sales increasing by 14.1% year-over-year to $39.7 billion, aided by an extra operating week. Adjusted EPS came in at $3.13, also beating estimates. U.S. comparable sales grew by 1.3%, and customer transactions increased by 7.6%.
Fiscal Year 2025 Outlook: While specific Q1 guidance isn't available in the immediate results, analysts expect an adjusted EPS of $14.98 for the full fiscal year 2025, a slight decrease from the $15.24 reported in fiscal 2024. However, there's an anticipation of a rebound in fiscal 2026.
Home Depot (HD) Guidance
During the Home Depot Fourth Quarter 2024 Earnings Conference Call, Ted Decker, CEO, outlined the company's financial performance and future guidance. Fiscal 2024 sales reached $159.5 billion, a 4.5% increase, while comp sales declined by 1.8%. U.S. stores experienced a negative comp of 1.8%, but fourth-quarter comp sales rose by 0.8%. Adjusted diluted earnings per share were $15.24, nearly unchanged from the prior year. The acquisition of SRS contributed $6.4 billion in sales over seven months, with expectations for mid-single-digit organic growth in 2025. Home Depot plans to open 13 new stores in 2025, projecting total sales growth of 2.8% and comp sales growth of 1%. The adjusted operating margin is anticipated to be 13.4%, with a slight decrease in adjusted diluted earnings per share by approximately 2% compared to 2024. The company highlighted ongoing investments in strategic initiatives, including enhancing the interconnected shopping experience and expanding Pro customer services.
Key Things to Watch in the Q1 2025 Earnings Report
Sales for fiscal 2024 were $159.5 billion, an increase of 4.5% from the same period last year.
Total company comp sales decreased 1.8% and U.S. comp sales decreased 1.8% for fiscal 2024.
Performance against EPS expectations: Investors will be keen to see if Home Depot meets or exceeds the $3.59 consensus EPS forecast.
In the fourth quarter, comp sales increased 0.8% from last year and U.S. store comps were up 1.3%. Operating margin for the year was 13.5%, down from 14.2% in 2023, with a forecasted decline for fiscal 2025.
Diluted earnings per share for fiscal 2024 were $14.91, a decrease of 1.3% compared to fiscal 2023.
Trends in comparable sales: This will provide insights into the current demand for home improvement goods and the impact of any economic factors. Fifteen of nineteen U.S. regions delivered positive comps, with both Canada and Mexico reporting positive comps in local currency.
Customer traffic and average ticket: These metrics will offer a deeper understanding of customer behavior. Investments in store experience and capabilities have driven over $1 billion in incremental sales on an annualized basis in seventeen markets.
Any commentary on the housing market: As a significant player in the home improvement sector, Home Depot's perspective on the housing market and its potential impact on their business will be valuable. In fiscal 2024, Home Depot opened twelve new stores and plans to open thirteen more in fiscal 2025.
There is continued pressure on larger discretionary projects which typically leverage financing.
Updates on strategic initiatives: Investors will be interested in any progress on the company's investments in its supply chain, digital capabilities, and Pro business. SRS contributed $6.4 billion in sales for the seven months owned, with expectations for mid-single digit organic growth in fiscal 2025.
Guidance for the rest of fiscal year 2025: Any revisions or updates to the full-year outlook will likely influence investor sentiment. Higher interest rates continue to pressure larger remodeling projects.
Home Depot (HD) Price Target
Based on 34 analysts from Tiger Brokers offering 12 month price targets for Home Depot in the last 3 months. The average price target is $418.30 with a high forecast of $475.00 and a low forecast of $297.34. The average price target represents a 11.97% change from the last price of $373.60.
The home improvement sector can be sensitive to economic conditions, interest rates, and consumer confidence. Home Depot's size and market leadership provide it with certain advantages, but it's still subject to broader economic trends. Home Depot's efforts to cater to both DIY customers and professional contractors are a key part of its strategy.
Technical Analysis - Exponential Moving Average (EMA)
Home Depot's stock (HD) has shown moderate growth over the past 52 weeks. Analysts' consensus view on Home Depot's stock is generally bullish, with a "Strong Buy" rating overall.
The average analyst price target for Home Depot's stock appears to be in the range of $426.53, suggesting potential upside from the current trading levels. But what is worrying would be the momentum as seen from RSI, it need to show a convincing build up of a positive momentum for HD, before we can saw that there is an existence of potential upside.
We can see a slight increase in the short interest ratio which could mean that investors are waiting to take profit if there is any price surge before its earnings.
Summary
The fiscal Q1 2025 earnings report for Home Depot will be important for understanding the current state of the home improvement market and how the company is navigating the economic landscape. While analysts anticipate a slight dip in EPS compared to the previous year, the market will be focused on comparable sales trends, customer behavior, and the company's outlook for the remainder of the year.
I think Home Depot might still faced continued pressure on the larger discretionary projects which typically leverage financing as interest rates remain high.
Appreciate if you could share your thoughts in the comment section whether you think Home Depot would be able to post a surprise EPS beat.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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