Home Depot Q4 earnings, sales top estimates; to open 13 stores
The Home Depot reported a strong quarter that included its first same-store increase in eight quarters, but issued soft guidance as consumers continue to hold back on large remodeling projects.
The home improvement giant reported net income of $3.03 billion, or $3.02 a share, for the quarter ended Feb. 2, up from $2.8 billion, or $2.82 a share, in the year-earlier period. Adjusted earnings per share were $3.13, ahead of the $3.04 analysts had expected.
Sales rose 14.1% to $39.7 billion, ahead of analysts’ estimates of $39.15 billion. Same-store sales rose 0.8%. Transactions rose 7.6% in the quarter. The average ticket was $89.11, compared to $88.87 in the prior-year quarter.
For the full year, sales increased 4.5% to $159.5 billion. Comparable sales decreased 1.8%.
“Our fourth quarter results exceeded our expectations as we saw greater engagement in home improvement spend, despite ongoing pressure on large remodeling projects,” said Ted Decker, chair, president and CEO. “Throughout the year, we remained steadfast in our investments across our strategic initiatives to position ourselves for continued success, despite uncertain macroeconomic conditions and a higher interest rate environment that impacted home improvement demand.”
In comments, Jonathan Reid, director, Fitch Ratings, noted that Home Depot saw good engagement in a number of categories and modest growth in comparable sales in the fourth quarter, which reflect the stabilization and provide some optimism.
"However, we remain cautious about the impact of high interest rates, which we believe will continue to constrain spending on larger projects," he added.
Looking ahead, Home Depot is planning to open 13 stores in fiscal 2025. It expects 2025 sales to increase about 2.8% and for same-store sales to rise about 1%. The company projected adjusted earnings per share will decline about 2% compared with the prior year.
[READ MORE: The Home Depot adds two new online delivery partners]
Home Depot raised its quarterly dividend by 2.2% to $2.30 a share, with the new dividend payable March 27 to shareholders of record as of March 13.
At the end of the fourth quarter, the company operated a total of 2,347 retail stores and over 780 branches across all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. The company employs more than 470,000 associates.
