Home Depot to report Q2 earnings as Wall Street eyes third straight quarter of US sales growth
Wall Street expects that same-store sales at Home Depot grew 1.4% in the last quarter, according to Bloomberg data. Same-store sales fell 0.3% in the first quarter, a reversal from the fourth quarter's 0.8% uptick. Global same-store sales had declined in eight straight quarters before the uptick in Q4.
In the US, same-store sales are expected to rise 1.6%, which would mark the third straight quarter of positive comps in Home Depot's home market. The company hasn't reported three consecutive quarters of US same-store sales growth since the third quarter of 2022.
Telsey Advisory Group's Joe Feldman said the higher growth will likely be realized from a combination of easing comparisons and a return to larger, discretionary projects like kitchen and bath remodels.
"We anticipate home improvement demand trends improving over time, as consumers stop putting off projects despite high interest rates, eventually getting used to the rates as opposed to waiting for them to fall," Feldman said.
Revenue is expected to tick 5% higher year over year to $42.4 billion. Adjusted earnings per share are expected to come in at $4.72, compared to $4.67 in the same time period last year.
In the first quarter, Home Depot reiterated its annual forecast, saying it expected net sales to grow by 2.8% and same-store sales to increase by 1% for the full fiscal year.
Home Depot did not provide Q2 guidance, but executive vice president of merchandising Billy Bastek called the second quarter its "Super Bowl" season. He said the chain has not stockpiled inventory due to tariffs like some retailers, but "in-stock rates have never been better."
A Home Depot spokesperson told Yahoo Finance last quarter that the chain planned to work with suppliers and diversify its sourcing instead of raising prices. "Twelve months from now, no single country outside of the United States will represent more than 10% of our purchases," the company said.
Home Depot stock has been moving higher ahead of this report as interest rates have moderated in anticipation of the Fed cutting rates next month, with the stock rising more than 10% in the last month. Rival Lowe's (LOW) has seen its stock rise 15%.
"While the macro remains choppy, we expect Home Depot to see continued share gains as it accelerates growth and capabilities with the complex pro, both organically and inorganically," Bank of America analyst Robert Ohmes wrote in a recent note.
Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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