The logo of American home improvement chain Home Depot is seen in Mexico City, Mexico, January 15, 2020.
Luis Cortés | Reuters
Home deposit will report its latest results Tuesday as the retailer works to attract more sales from home professionals such as roofers and landscapers.
Here’s what Wall Street expects for the fiscal first quarter, based on a survey of analysts by LSEG:
- Earnings per share: $3.60 expected
- Revenue: $36.66 billion expected
Home Depot is facing a tougher real estate environment, which has dampened demand for DIY projects. About half of Home Depot’s sales come from DIY customers and the other half from professionals.
As interest rates remain high, consumers are reluctant to move out of their homes and buy a new one – the kind of turnover that often inspires home projects. They also purchased fewer big-ticket items and took on smaller projects.
Inflation could also play a role in this decline, as consumers spend more money on essentials and have to make trade-offs when spending their discretionary income.
Home Depot saw sales moderate after more than two years of explosive demand during the Covid pandemic. The company posted its worst revenue shortfall in nearly two decades and cut its guidance in the first quarter of last year. Home Depot’s sales totaled $152.7 billion in the fiscal year ended January, a 3% year-over-year decline.
To overcome these challenges, the home improvement retailer has accelerated its strategy to attract professionals, as they tend to purchase larger quantities and offer a more stable source of sales. Home Depot announced in late March that it would acquire SRS Distribution, a Texas-based specialty distributor of roofing, landscaping and swimming pool supplies, for $18.25 billion, in the largest acquisition of the history of the company. Home Depot has a growing network of distribution centers across the country that can store and deliver roofing shingles, insulation and other supplies directly to job sites.
In addition to courting professionals, Home Depot is trying to boost its growth by opening a dozen new stores this fiscal year and adding features to improve its online and in-store experience.
Home Depot said in March that it expects its total sales to increase about 1% in fiscal 2024, which includes an additional week. However, the retailer said it expects comparable sales, excluding the impact of store openings and closures, to decline by about 1%, excluding this additional week.
Home Depot shares closed Monday at $340.96. Year to date, Home Depot shares have fallen about 2%, compared with the S&P 500’s gains of about 9%.
This is a developing story. Please check again for updates.
cnbc
