:max_bytes(150000):strip_icc()/INV_HomeDepotStore_GettyImages-1598855235-befe6b03b5c14be58aa976470ca01e7b.jpg "What you need to know before Home Depot’s earnings release")
Key findings
- Home Depot reports earnings on Tuesday before the stock market opens.
- Analysts expect slight declines in sales and profits compared to the same period last year as inflation-concerned consumers hold back on expensive home improvement projects.
- Home Depot completed its acquisition of SRS Distribution during the quarter as the retailer looks to expand its market share among professional contractors.
Home Depot (HD) will report its results on Tuesday morning. Analysts are forecasting slight declines in sales and profits due to a decline in consumer spending.
Analysts expect Home Depot’s second-quarter revenue to be $42.57 billion, down slightly from $42.92 billion a year ago. Net income is expected to decline to $4.48 billion, compared to $4.66 billion in the second quarter of fiscal 2023.
A decline in spending on expensive items as inflation-stricken consumers put off home improvement projects has impacted both Home Depot and competitors like Lowe’s (LOW) in recent quarters.
| Analyst estimates for Q2 2024 | 1st quarter 2024 | 2nd quarter 2023 | |
| revenue | 42.57 billion US dollars | 36.42 billion US dollars | 42.92 billion US dollars |
| Diluted EPS | $4.52 | 3,63 € | $4.65 |
| Net income | 4.48 billion US dollars | 3.6 billion US dollars | 4.66 billion US dollars |
Key figure: Instructions
After Home Depot reaffirmed its full-year guidance in its first-quarter report, analysts at JPMorgan said the retailer may join other companies in lowering its forecasts this earnings season.
“Given the mixed backdrop and the prospect of elections and a shortened holiday season, we expect interest rate cuts to continue broadly, albeit to varying degrees,” JPMorgan analysts wrote of retail.
However, analysts said there is “no panic about capital expenditure cuts” at Home Depot, suggesting the retailer may have the flexibility to effectively manage its spending to weather macroeconomic uncertainty.
Business Spotlight: SRS Distribution Agreement, Pro Market Share
Home Depot could also provide updates on its $18.25 billion acquisition of SRS Distribution, a specialty distributor that works with contractors in roofing and pool services, among other businesses. The deal was announced in March and Home Depot said it closed in June, after originally targeting a close by the end of fiscal 2024.
The retailer has emphasized increasing its market share among professional contractors, especially given consumer pressure to spend big. In the company’s first-quarter earnings call, executives said the SRS deal will complement their existing professional sales ecosystem and expand the professional market accessible to Home Depot.
Home Depot’s share price was little changed since the beginning of the year at 10:00 a.m. Eastern Time, at $346.26.
