Categories Analysis, Retail

What to look for when Home Depot (HD) reports Q1 2024 earnings

Analysts are projecting revenue of $36.6 billion for the first quarter of 2024

Shares of The Home Depot (NYSE: HD) stayed red on Tuesday. The stock has gained 17% over the past 12 months. The home improvement retailer is scheduled to report its first quarter 2024 earnings results on Tuesday, May 14, before market open. Here’s a look at what to expect from the earnings report:

Revenue

Analysts are projecting revenue of $36.6 billion for the first quarter of 2024, which compares to $37.3 billion reported in the same period a year ago. In the fourth quarter of 2023, sales decreased nearly 3% year-over-year to $34.8 billion.

Earnings

The consensus estimate for EPS in Q1 2024 is $3.60, which compares to EPS of $3.82 reported in Q1 2023. In Q4 2023, the company reported EPS of $2.82.

Points to note

On its Q4 earnings call, Home Depot said that the pressures it faced in 2023 such as a decline in existing home sales and comp pressure from lumber deflation were not likely to repeat in 2024. However, it expects to see a deceleration in personal consumption growth during 2024 which is likely to put pressure on the home improvement business.

Throughout 2023, Home Depot saw softness in big-ticket discretionary purchases, with customers putting off larger projects and taking on smaller ones. Last quarter, the company said that higher interest rates seen at the beginning of 2024 could continue to pressure demand for larger projects. This might have an impact on Q1 results.

The home improvement retailer also believes the effects of the pull-forward of demand during the pandemic along with some project deferral could impact demand in 2024. Due to these factors, it is planning for a year of continued moderation in 2024.

Last quarter, the company’s Pro and DIY customer’s performance was relatively in line with each other. Home Depot said although Pro backlogs were lower compared to a year ago, they still remained stable. The company is likely to see stable demand in its Pro segment in the first quarter as well.

Home Depot continues to invest in improving the experience for its Pro customer by expanding its assortment and fulfillment options, and enhancing digital capabilities. These efforts are likely to pay off in Q1.

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