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Home Depot Tops Q1 Revenue Estimates Amid Housing Market Challenges
Home Depot reported strong first-quarter revenue growth, exceeding Wall Street expectations as customers focused on smaller home improvement projects. The company reaffirmed its fiscal 2025 guidance amid a cautious housing market and inflation concerns.
Home improvement giant Home Depot Inc (NYSE: HD) saw its revenue climb in the first quarter of fiscal 2025, reaching $39.86 billion, up from $36.42 billion a year earlier. The figure surpassed analyst expectations of $39.3 billion, according to FactSet.
Comparable sales for the quarter declined 0.3%, while U.S. comparable sales edged up 0.2%. The company noted that foreign exchange rates negatively impacted total comparable sales by approximately 70 basis points.
Net earnings for the quarter were $3.4 billion , or $3.45 per diluted share, down from $3.6 billion, or $3.63 per diluted share, in the same period last year. Adjusted diluted earnings per share came in at $3.56, compared with $3.67 in the prior-year period.
“Our first quarter results were in line with our expectations as we saw continued customer engagement across smaller projects and in our spring events,” said Ted Decker, chair, president, and CEO.
“We feel great about our store readiness and product assortment as spring continues to break across the country, and I would like to thank our associates for their continued hard work and dedication,” said Decker.
Despite the earnings dip, Home Depot reaffirmed its guidance for fiscal 2025, which consists of a projected total sales growth of approximately 2.8% and comparable sales growth of approximately 1.0% for the comparable 52-week period. The company plans to open around 13 new stores and expects a gross margin of approximately 33.4%.
Diluted earnings per share are forecasted to decline approximately 3% from $14.91 in fiscal 2024, while adjusted diluted earnings per share are expected to fall around 2% from $15.24 in the previous year.
Shares of the Atlanta-based company rose more than 3% in premarket trading on Tuesday.
Home Depot, along with other home improvement retailers, has been navigating a challenging environment as elevated borrowing costs and persistent inflation have led homeowners to delay larger renovation projects, AP reported.
The U.S. housing market continues to grapple with a sales downturn that began in 2022, when mortgage rates started rising from pandemic-era lows.
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