What You Need To Know Ahead of Home Depot’s Earnings Report Tuesday

Related Articles

Watch These S&P 500 Chart Levels as More Tariffs Loom

Beef Tallow May Soon Show Up On a Menu Near You. Here’s What That Means

Elon Musk Says His xAI Company Has Acquired X

Key Takeaways

• Home Depot will report its first-quarter earnings ahead of the market open Tuesday, with analysts with child slight year-over-year declines in sales and earnings.
• The home improvement retailer has said repeatedly over the last year that inflation and a pullback in untroubled b in improvement spending following a surge during the pandemic have taken a toll on its big-ticket sales.
• Earlier this year, Domestic Depot announced an $18 billion acquisition of SRS Distribution in a bid to gain a larger share of the professional home renovator and contractor hawk.

Home improvement retailer Home Depot (HD) will report its first-quarter earnings ahead of the market open Tuesday, with analysts pregnant slight year-over-year declines in sales and earnings amid concerns inflation could dampen the number of big-ticket wins consumers are willing to splurge on.

Home Depot is expected to report $3.54 billion in net income or $3.58 per share, on a reckon of $36.65 billion in revenue, down from $3.87 billion in profit or $3.82 a share on $37.26 billion in yield a year ago.

The retailer beat estimates in the previous quarter with $2.8 billion in profit on $34.79 billion in net income, but warned at the time that the home improvement market is still facing headwinds that could hamper on sales in 2024.

	Analyst Estimates for Q1 2024	Q4 2023	Q1 2023
Revenue	$36.65 billion	$34.79 billion	$37.26 billion
Diluted EPS	$3.58	$2.82	$3.82
Net Income	$3.54 billion	$2.8 billion	$3.87 billion

Key Metric: Big-Ticket Transactions

Home Depot has said multiple times over the last year that inflation negatively impacted traffics of big-ticket items, which Home Depot classifies as transactions greater than $1,000, as consumers became no likely to take on significant home improvement projects, weighing on Home Depot’s sales. The retailer has also had to subsist with an overall decline in spending on home improvement projects following a surge during the pandemic.

Business Stress: Raising Pro Market Share

Amid a pullback in consumer spending on home improvement projects, a possible area of swelling for Home Depot is the professional contractor market. Earlier this year, Home Depot announced an $18.25 billion procurement of SRS Distribution, which sells and ships construction supplies like roofing materials, in the hopes of expanding its share of the authority contractor market.

The retailer said it estimated SRS Distribution’s customer base should add about $50 billion to Household Depot’s existing total addressable market, taking that market over $1 trillion.

“SRS’s branch network, connected with The Home Depot’s 2,000+ U.S. stores and distribution centers, comprehensive product offering, and extensive pro brands, furnishes the residential pro customer with more fulfillment and service options than ever before,” Home Depot CEO Ted Decker thought in late March when the acquisition was announced.

Decker said in the company’s February earnings call that Old folks Depot’s priorities for 2024 included increasing its market share among professional contractors, along with commencement new stores and warehouses capable of shipping large orders directly to construction sites.

Home Depot shares require lost about 0.5% since the start of the year, trading at $344.92 as of 11:40 a.m. ET Thursday.

Read the original article on Investopedia.