The Home Depot Inc. HD has reported fourth-quarter fiscal 2024 results, wherein earnings and sales surpassed the Zacks Consensus Estimate and improved year over year. HD surpassed fiscal fourth-quarter expectations with strong home improvement spending despite pressure on large remodels. Strategic investments position it for future growth.
Home Depot's adjusted earnings of $3.13 per share increased 9.4% from $2.82 in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $3.04 per share.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Net sales advanced 14.1% to $39.7 billion from $34.8 billion in the year-ago quarter. Also, sales surpassed the Zacks Consensus Estimate of $39.14 billion. The company’s sales benefited from an additional week in the fiscal fourth quarter, which added $2.5 billion in sales.
The Zacks Rank #3 (Hold) company’s shares have lost 4.7% in the past three months compared with the industry's 11.6% decline.
HD is confident about its initiatives to strengthen the business. It has been on track with its investments to craft the best inter-connected experience for customers, improving the pro wallet through its unique ecosystem of capabilities and expanding stores. It is also optimistic about the future of the home improvement industry and its ability to expand market share in this space.
Detailed Picture of HD’s Q4 Results
Home Depot's comparable sales improved 0.8% in the reported quarter. The company’s comparable sales in the United States rose 1.3% in the fiscal fourth quarter. The increase resulted from the rise in customer transactions and the average ticket. In the fiscal fourth quarter, customer transactions improved 7.6% year over year, whereas the average ticket was up 0.3%. Sales per retail square foot rose 1.2%.
Our model estimated comps to decline 2.4% in the fourth quarter of fiscal 2024, led by a 1.8% decline in customer transactions and a 0.8% fall in the average ticket.
The Home Depot, Inc. Price, Consensus and EPS Surprise
The Home Depot, Inc. price-consensus-eps-surprise-chart | The Home Depot, Inc. Quote
In dollar terms, the gross profit rose 13.3% year over year to $13 billion in the fiscal fourth quarter. However, the gross margin of 32.8% declined 30 basis points (bps) year over year. Our model predicted a 10-bps year-over-year decline in the gross margin to 33% for the fiscal fourth quarter.
SG&A expenses of $7.7 billion increased 15.7% from $6.7 billion in the year-ago quarter. SG&A expenses, as a percentage of sales, grew 30 bps year over year to 19.5%.
The adjusted operating income rose 10.7% year over year to $4.6 billion, while the adjusted operating margin of 11.7% contracted 40 bps year over year. The decline in the operating margin resulted from soft gross margin and higher SG&A expenses, as a percentage of sales.
Our model predicted the SG&A expense rate to increase 30 bps year over year to 19.5%. Consequently, we anticipated the operating income to increase 7.7% year over year and the operating margin to contract 40 bps to 11.7% for the fiscal fourth quarter.
HD’s Other Financial Updates
Home Depot ended fiscal 2024 with cash and cash equivalents of $1.7 billion, a long-term debt (excluding current installments) of $48.5 billion and shareholders' equity of $6.6 billion. In fiscal 2024, the company generated $19.8 billion of net cash from operations.
What HD Plans for Fiscal 2025?
Management outlined its sales and earnings per share view for fiscal 2025. Home Depot anticipates sales to increase 2.8% year over year. The company expects comparable sales to increase 1% for the 52 weeks.
HD estimates the gross margin for fiscal 2025 to be 33.4%, with an operating margin of 13%. It expects an adjusted operating margin of 13.4%. The company expects an effective tax rate of 24.5% for fiscal 2025. Net interest expenses are likely to be $2.2 billion. HD plans to open 13 stores for fiscal 2025.
Home Depot anticipates GAAP earnings per share to decline 3% year over year for fiscal 2025. HD expects adjusted earnings per share to fall 2% year over year. The company anticipates capital expenditures to be 2.5% of total sales.
Stocks to Consider
Some better-ranked stocks are Boot Barn BOOT, Ethan Allen Interiors Inc. ETD and Somnigroup International Inc. SGI.
Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boot Barn’s current fiscal-year sales and earnings indicates growth of 14.9% and 21.4%, respectively, from the previous year’s figures. BOOT has a trailing four-quarter average earnings surprise of 7.2%.
Ethan Allen Interiors is a leading interior design company and manufacturer and retailer of quality home furnishings. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Ethan Allen Interiors’ current financial-year sales and earnings indicates growth of 3.5% and 6.8%, respectively, from the year-ago numbers. ETD has a trailing four-quarter earnings surprise of 0.2%, on average.
Somnigroup is involved in the development, manufacturing and marketing of bedding products primarily in North America and internationally. It currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Somnigroup’s current financial-year sales and earnings implies growth of 29.8% and 11.4%, respectively, from the year-ago period’s actuals. SGI has a trailing four-quarter earnings surprise of 2.7%, on average.
This article originally published on Zacks Investment Research (zacks.com).
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Dj Home Depot Best Performer In The Djia So Far Today - Data Talk
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Home Depot Turns a Corner: New Highs Likely This Year
Home Depot’s Q4 2024 report and guidance for 2025 have plenty to be unhappy about, but the simple truth is that this company turned a corner in 2024. It is on track for its stock to hit new highs that could come before the middle of the year.
At face value, current conditions offset the warning housing markets may not improve. Those include a reversion to growth, better-than-expected earnings, and sustained capital returns supported by strength in the home improvement market.
New home sales are sluggish, and big-ticket items still lag, but strength in smaller DIY projects is present and likely to continue this year.
Home Depot Ends 2024 With Momentum: Issues Cautious Guidance for 2025
Home Depot had a solid Q4 with results impacted by an extra week, and both the reported and adjusted figures were above consensus forecasts. The company reported $39.7 billion in net revenue for a gain of 14.1% year-over-year, which exceeded MarketBeat’s reported consensus by 160 basis points—the extra week added $2.5 billion to the top-line, aided by a 0.8% increase in comp sales.
Comp sales growth is important because this is the first quarter in two years to show positive comps, and tickets and ticket averages drove the comp. Transactions are up 7.6%, the first positive reading in 11 quarters, while the ticket average is up 0.3% for the first positive reading in 6 quarters.
The margin news is also good. The company experienced some margin pressure but was able to mitigate it to a degree. The net result is high single-digit net earnings and low double-digit adjusted EPS growth compared to the mid-teen revenue growth pace. The adjusted EPS rose by nearly 11% to outpace consensus by almost 300 basis points, underpinning an already solid capital return outlook.
The guidance is mixed but ultimately favors higher share prices. The company forecasted a 2.8% revenue growth, including a 1% comp store increase and 13 new locations, slightly below the analysts’ consensus, offset by margin strength. The company forecast adjusted EPS to contract by 2% compared to the 4% consensus target, which is likely a cautious estimate. The company is heading into its busiest seasons, with consumer tailwinds beginning to blow.
Home Depot Raises Dividend for 2025 [content-module:DividendStats|NYSE:HD]
Home Depot’s 2025 dividend increase isn’t robust, but it is still a sign of the company’s financial health that helps to boost shareholder value. The 2.2% increase is sustainable and allows for effective investment and opportunistic acquisitions, which are boosting shareholder value.
At the end of F2024, the balance sheet highlights include reduced cash offset by increased receivables, inventories, goodwill, and intangibles. Liabilities, including long-term debt, are also up but far less than assets, leaving equity up significantly. Home Depot’s equity surged more than 550%, leaving shareholders in a good position and the company with ample flexibility.
The initial analyst response to the 2025 guidance and dividend increase is bullish. The first revision tracked by MarketBeat was from D.A. Davidson, which raised its price target to $500. The $500 target is well above the $443 consensus, which would be a new all-time high if reached. D.A. Davidson’s target is now the highest issued by major analysts and offers more than 25% upside from critical support levels.
Home Depot Confirms Support at a Critical Level
Home Depot confirmed support at a critical level following the 2025 guidance. The critical support is at multimonth lows and the neckline of a potential Head & Shoulders Reversal. The takeaway for investors is that HD stock is unlikely to correct to lower levels and will likely trend sideways as its market regains traction. A move above the $415 level will be significant and could increase buying activity.
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Home Depot rises as fourth-quarter sales help offset disappointing guidance
Investing.com - Home Depot (NYSE:HD) has unveiled a comparable sales growth forecast for its 2025 fiscal year that was short of expectations, as the group flagged an "uncertain" operating environment.
The update comes as higher interest rates weighed on demand for home improvement projects throughout its prior financial year, Home Depot CEO Ted Decker said in a statement.
An easing cycle by the Federal Reserve last year helped to relieve some pressure on borrowing costs faced by homeowners considering renovating their properties before putting them up for sale. However, executives at Home Depot have flagged caution around any immediate benefits being derived from the cuts.
Meanwhile, the Fed recently pushed pause on the series of rate reductions, partly citing murkiness around the broader economic outlook due to the possible impact of President Donald Trump's tariff plans on inflationary pressures. Fed officials have said they will take a wait-and-see approach to further potential cuts in the months ahead.
Against this backdrop, Home Depot said it expects 52-week comparable sales to grow by 1% versus the prior year, compared with Bloomberg consensus estimates of 1.65%. Shares in Home Depot inched down in premarket U.S. trading on Tuesday.
Still, fourth-quarter net sales at the top U.S. home improvement chain rose by 14% against the year-ago period to $39.70 billion, topping Wall Street projections of $39.13 billion. Adjusted earnings per share of $3.13 were also higher than the $3.04 seen by analysts. The three months ended on February 2 consisted of 14 weeks versus 13 in the previous year, Home Depot noted, adding that there was a roughly $2.5 billion sales benefit because of the extra week.
Comparable sales also grew by 0.8%. Analysts had anticipated a decline of 1.71%. The company said the additional week was not included in the comparable sales results for the quarter.
Despite "ongoing pressure on large remodeling projects," Decker said the firm was boosted by "greater engagement in home improvement spend" during the fourth quarter.
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Tesla, Oaktree among Tuesday's market cap stock movers
Tuesday's trading session has brought significant movements across the board, with mega-cap stocks like Tesla Motors (NASDAQ:TSLA) and Nvidia Corp (NASDAQ:NVDA) experiencing notable declines, while others such as Eli Lilly And Co (NYSE:LLY) and Home Depot (NYSE:HD) are on the rise. In the large-cap arena, Oaktree Acquisition Corp (NYSE:HIMS) and Sempra Energy (NYSE:SRE) have seen sharp drops. Here's a closer look at some of the key stock movers from mega-caps to small caps.
Mega-Cap Movers (Market Cap $200B+):
Tesla Motors (TSLA): -7.12%
Nvidia Corp (NVDA): -3.55%
Eli Lilly And Co (LLY): Eli Lilly acquires Organovo's FXR program for IBD treatment; +2.47%
Home Depot (HD): The Home Depot Announces Fourth Quarter and Fiscal 2024 Results; Increases Quarterly Dividend by 2.2%; Provides Fiscal 2025 Guidance; +3.32%
Intuitive Surgical Inc (NASDAQ:ISRG): -5.05%
Palantir Technologies Inc (NASDAQ:PLTR): -4.43%
Pepsico (NASDAQ:PEP): +2.72%
Oracle Corp (NYSE:ORCL): -2.73%
Avago Technologies (NASDAQ:AVGO): Broadcom Extends PCIe Industry Leadership with End-to-End Gen 6 Portfolio for AI Infrastructure; -2.69%
Wal-mart Stores (NYSE:WMT): Walmart Leadership to Participate in Upcoming Investor Events; +2.43%
Large-Cap Stock Movers (Market Cap $10B-$200B):
Oaktree Acquisition Corp (HIMS): Hims & Hers Health, Inc. Reports Fourth Quarter and Full Year 2024 Financial Results; -27.93%
Sempra Energy (SRE): ONCOR REPORTS 2024 RESULTS; ANNOUNCES $36 BILLION 2025-2029 CAPITAL PLAN; -24.03%
Ctrip.com International (NASDAQ:TCOM): -13.75%
Tempus AI (TEM): Tempus AI shares slide 7% as Q4 results disappoint; -13.74%
MicroStrategy Inc (NASDAQ:MSTR): -11.32%
Vector Acquisition (NASDAQ:RKLB): -10.03%
Astera Labs (ALAB): -11.0%
Zoom Video Communications (NASDAQ:ZM): Zoom Communications Reports Fourth Quarter and Fiscal Year 2025 Financial Results; -8.34%
Solventum (SOLV): Solventum Announces Sale of its Purification & Filtration Business to Thermo Fisher Scientific Inc (NYSE:TMO). for $4.1B; +10.93%
Li Auto Inc (NASDAQ:LI): +12.14%
Mid-Cap Stock Movers (Market Cap $2B-$10B):
Blue Safari Group Acquisition Corp (BTDR): Bitdeer Reports Unaudited Financial Results for the Fourth Quarter and Full Year of 2024; -25.03%
BITX (BITX): -16.77%
Kontoor Brands (NYSE:KTB): Kontoor Brands Q4 earnings beat estimates, but stock falls on weak guidance; -15.46%
Civitas Resources (CIVI): Civitas Resources, Inc. Appoints Lloyd W. Helms, Jr. to Board of Directors; -16.22%
Goosehead Insurance Inc (NASDAQ:GSHD): Goosehead Insurance, Inc. Announces Fourth Quarter and Full Year 2024 Results; +15.51%
Veracyte Inc (NASDAQ:VCYT): Veracyte Announces Fourth Quarter and Full Year 2024 Financial Results; -11.99%
TSLL (TSLL): -13.96%
Small-Cap Stock Movers (Market Cap $300M-$2B):
Diginex Inc (DGNX): -39.04%
Churchill Capital III Corp (MPLN): Claritev Reports Fourth Quarter and Full Year 2024 Results with Initial Guidance for Full Year 2025; -36.64%
Clean Energy Fuel (NASDAQ:CLNE): Clean Energy Reports Revenue of $109.3 Million and 62.0 Million RNG Gallons Sold for the Fourth Quarter of 2024; -29.7%
Mediaalpha Inc (MAX): MediaAlpha Announces Fourth Quarter and Full Year 2024 Financial Results; -20.95%
Maravai Lifesciences Holdings Inc (MRVI): Maravai LifeSciences Postpones its Fourth Quarter and Full Year 2024 Earnings Release and Conference Call; -22.82%
Good Works Acquisition (CIFR): Cipher Mining (NASDAQ:CIFR) Provides Fourth Quarter and Full Year 2024 Business Update; -21.65%
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Mw Home Depot Says High Interest Rates Are Hampering Home-Remodeling Plans
You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.
You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.
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