Home Depot on Tuesday topped Wall Street\u2019s quarterly sales expectations, even as elevated interest rates and housing prices dampened consumer demand for large remodels and pricier projects.<\/p>\n
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.<\/p>\n
In an interview with CNBC, Chief Financial Officer Richard McPhail said \u201chousing <\/strong>is still frozen by mortgage rates.\u201d 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.<\/p>\n Home Depot anticipates consumers will stop putting off projects as they gradually <\/strong>get used to higher interest rates, rather than waiting for them to fall, McPhail said. <\/p>\n \u201cThey tell us their lives are moving on,\u201d he said. \u201cTheir families are growing. They\u2019re moving for a new job. They\u2019re 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.\u201d<\/p>\n Here\u2019s what the company reported for the fiscal fourth quarter compared with Wall Street\u2019s estimates, according to a survey of analysts by LSEG:<\/p>\n Home Depot shares were up nearly 5% in midday trading. The company was holding an earnings call on Tuesday morning.<\/p>\n In the three-month period that ended Feb. 2, Home Depot\u2019s 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.<\/p>\n 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\u2019 expectations of a decline of 1.7%, according to StreetAccount. Comparable sales in the U.S. <\/strong>increased 1.3% year over year.<\/p>\n Regions hit by hurricanes Helene and Milton contributed about 0.6% to comparable sales, McPhail said.<\/p>\n Customers spent more and visited Home Depot\u2019s 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.<\/p>\n Home Depot has faced a more difficult backdrop for selling supplies for home improvement projects. Sales growth slowed in 2023, after consumers\u2019 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.<\/p>\n Since roughly the middle of 2023, Home Depot\u2019s leaders have pinned the company\u2019s 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.<\/p>\n 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.<\/p>\n Tougher weather also hurt the company\u2019s sales in January, and that\u2019s carried into February in some parts of the country, McPhail said.<\/p>\n \u201cWhere weather is good, we continue to see engagement,\u201d he said. \u201cWhere weather is tough, projects get put on the shelf.\u201d<\/p>\n 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. <\/p>\n 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\u2019s digital business. He chalked that up to the company\u2019s investments in faster deliveries, particularly with getting appliances and power tools to customers.<\/p>\n McPhail said <\/strong>Home Depot opened 12 new stores in 2024, and it plans to open 13 new locations in the coming year. <\/p>\n 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\u2019s history.<\/p>\n Some pro-heavy categories, such as roofing, drywall and lumber, saw sales increases in the quarter because of Home Depot\u2019s push to serve contractors and other home pros better, McPhail said.<\/p>\n Shares of Home Depot closed Monday at $382.42. As of Monday\u2019s close, the company\u2019s shares have fallen about 2% so far this year. That trails behind the S&P 500\u2032s approximately 2% gains during the same period.<\/p>\n<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Home Depot on Tuesday topped Wall Street\u2019s quarterly sales expectations, even as elevated interest rates and housing prices…<\/p>\n","protected":false},"author":1,"featured_media":14047,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":["post-14046","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/posts\/14046","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/comments?post=14046"}],"version-history":[{"count":0,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/posts\/14046\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/media\/14047"}],"wp:attachment":[{"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/media?parent=14046"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/categories?post=14046"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dailywashingtoninsider.com\/index.php\/wp-json\/wp\/v2\/tags?post=14046"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}