What to look for when Home Depot (HD) reports Q1 2025 earnings

Home Depot (NYSE: HD) is working to overcome the impact of macroeconomic challenges on the business, mainly through diversification and continued investments across its strategic initiatives. The home improvement retailer is preparing to report first-quarter earnings, with market watchers predicting a mixed outcome. The company’s extensive store network and omnichannel strategy provide it a competitive advantage.

The Stock

After entering 2025 on a positive note, Home Depot’s stock pulled back and has moved mostly sideways since then. It has lost 8% in the past six months, after climbing to an all-time high in early December. Going by HD’s impressive track record of resilience, it is likely to bounce back and create shareholder value in the coming months. Consistent dividend hikes and the above-average yield further bolster its appeal as a long-term investment.

Analysts following Home Depot forecast earnings of $3.60 per share for the first quarter of fiscal 2025, compared to $3.63 per share last year. The estimate for Q1 revenue is $39.19 billion, which represents a 7.6% increase from the year-ago quarter. The company is expected to release the report on Tuesday, May 20, at 6:00 am ET. Investors are keeping a close watch on the event, which may shed light on the effects of new import tariffs on the home improvement market.

Results Beat

In the fourth quarter of 2024, Home Depot’s adjusted profit increased 9.4% annually to $3.13 per share. Net income was $3 billion or $3.02 per share in the January quarter, compared to $2.8 billion or $2.82 per share in the prior-year quarter. Global comparable store sales returned to growth, after dropping in the trailing quarters. The top line and earnings both exceeded Wall Street’s expectations, maintaining the recent trend of consistently beating estimates.

From Home Depot’s Q4 2024 earnings call:

“Throughout the year, we remain steadfast in our investments across our strategic initiatives despite uncertain macroeconomic conditions in a higher interest rate environment that impacted home improvement demand. Our strategic priorities remain creating the best inter-connected shopping experience, growing our Pro wallet share through a unique ecosystem of capabilities, and building new stores. We are always improving our interconnected shopping experience. We know that our customers want faster delivery than ever before.”

Outlook

Recently, the company faced a slowdown in demand due to economic uncertainties and higher interest rates, which is expected to remain a drag on bigger home improvement projects in the foreseeable future. However, there has been an uptick in comparable sales in the pro segment lately, outpacing the DIY division. For fiscal 2025, the company expects sales to increase by 2.8%, and it sees a 1% growth in comparable sales. Full-year earnings per share and adjusted earnings per share are expected to decline by around 3% and 2% respectively.

Shares of Home Depot experienced high volatility this week, and they pared a part of the early gains on Tuesday. The stock traded lower in the afternoon, hovering just below its 52-week average price.