Latest news with #McPhail
Yahoo
20-05-2025
- Business
- Yahoo
Home Depot (HD) Holds Line on Prices, Reaffirms 2025 Forecast
Home Depot (HD, Financials) reported mixed Q1 results Tuesday and reaffirmed its 2025 guidance, while saying it will not raise prices in response to tariffs due to its supply chain diversification and scale advantages. Warning! GuruFocus has detected 1 Warning Sign with HD. Revenue reached $39.86 billion, ahead of Wall Street's estimate of $39.31 billion, according to LSEG. Adjusted earnings per share were $3.56, falling short of the $3.60 consensus. CFO Richard McPhail said the company and its suppliers have diversified sourcing, reducing reliance on China. By 2026, no single non-U.S. country will account for more than 10% of imports, he said. McPhail added the company intends to maintain current price levels to gain market share even as peers, such as Walmart, raise prices. The $18.25 billion acquisition of SRS Distribution helped push total Q1 sales up about 9% year over year, with $2.6 billion of that growth attributed to the SRS business. Comparable sales companywide declined 0.3%, but monthly data showed improvement: down 3.3% in February, up 1.3% in March, and up 1.8% in April. McPhail cited poor weather in February as a key drag. Spring sales showed strength in appliance, garden, plumbing, and electrical categories. However, big-ticket items like kitchen countertops and bath products remained soft due to high interest rates and consumer caution. CEO Ted Decker said the macro backdrop, especially elevated mortgage rates, has led customers to delay large projects. Roughly 80% of Home Depot's customers are homeowners, a segment McPhail described as resilient. The average transaction size in Q1 was $90.71, in line with the prior year. Despite the seasonal lift, shares of Home Depot are down 2% year to date, underperforming the S&P 500's roughly 1% gain. As of Monday's close, the stock traded at $379.38, giving it a market value of about $377 billion. See insider trades for HD. Explore Peter Lynch chart. This article first appeared on GuruFocus.
Yahoo
20-05-2025
- Business
- Yahoo
Home Depot (HD) Holds Line on Prices, Reaffirms 2025 Forecast
Home Depot (HD, Financials) reported mixed Q1 results Tuesday and reaffirmed its 2025 guidance, while saying it will not raise prices in response to tariffs due to its supply chain diversification and scale advantages. Warning! GuruFocus has detected 1 Warning Sign with HD. Revenue reached $39.86 billion, ahead of Wall Street's estimate of $39.31 billion, according to LSEG. Adjusted earnings per share were $3.56, falling short of the $3.60 consensus. CFO Richard McPhail said the company and its suppliers have diversified sourcing, reducing reliance on China. By 2026, no single non-U.S. country will account for more than 10% of imports, he said. McPhail added the company intends to maintain current price levels to gain market share even as peers, such as Walmart, raise prices. The $18.25 billion acquisition of SRS Distribution helped push total Q1 sales up about 9% year over year, with $2.6 billion of that growth attributed to the SRS business. Comparable sales companywide declined 0.3%, but monthly data showed improvement: down 3.3% in February, up 1.3% in March, and up 1.8% in April. McPhail cited poor weather in February as a key drag. Spring sales showed strength in appliance, garden, plumbing, and electrical categories. However, big-ticket items like kitchen countertops and bath products remained soft due to high interest rates and consumer caution. CEO Ted Decker said the macro backdrop, especially elevated mortgage rates, has led customers to delay large projects. Roughly 80% of Home Depot's customers are homeowners, a segment McPhail described as resilient. The average transaction size in Q1 was $90.71, in line with the prior year. Despite the seasonal lift, shares of Home Depot are down 2% year to date, underperforming the S&P 500's roughly 1% gain. As of Monday's close, the stock traded at $379.38, giving it a market value of about $377 billion. See insider trades for HD. Explore Peter Lynch chart. This article first appeared on GuruFocus. Sign in to access your portfolio
Epoch Times
20-05-2025
- Business
- Epoch Times
Home Depot Says Tariffs Won't Impact Store Prices, Shares Spike Before Retreating
Shares of Home Depot rose nearly 9 percent in early trading on May 20 after the Atlanta-based home-improvement company said it doesn't plan to raise in-store prices despite concerns of a possible recession in the first quarter. During the company's 'I think from the micro [point of view], the worst concerns have passed,' Decker said, noting that recent U.S. employment and inflation reports also show the U.S. economy is more stable in May. 'We've gone from a dynamic where we were going to have a near-term, certain recession and stock market correction in April, to where markets have fully recovered,' he said. Decker's remarks followed earlier comments by Home Depot chief financial officer Richard McPhail, who stated in an early morning 'Because of our scale, the great partnerships we have with our suppliers and productivity that we continue to drive in our business, we intend to generally maintain our current pricing levels across our portfolio,' McPhail said. Related Stories 5/15/2025 5/20/2025 During the conference call, Decker reiterated McPhail's earlier comments, stating that one of the hallmarks of Home Depot's operations is the diversification of its supplier sourcing and supply chain. He said more than 50 percent of Home Depot's purchases at the present are sourced in the United States, giving the retailer giant more flexibility in navigating tariffs and inflationary pressures. 'Over the last several years, we have worked diligently with our vendors to further diversify our global supply chain,' Decker said. 'During that period, the vast majority of our supplier partners developed diversified sourcing strategies across several countries, including the United States.' 'We are already taking action to anticipate that the next 12 months from now, no single country outside of the United States will represent more than 10 percent of our purchases,' he said. Home Depot also reaffirmed its full-year guidance, which includes a nearly 2.8 percent increase in sales and comparable-sales growth of approximately 1 percent. The company also expects adjusted diluted earnings per share to decline by 2 percent, from $15.24 in year 2024. Further, it plans to open 13 new stores and maintains its capital expenditure forecast at about 2.5 percent of total sales for the year. For the first quarter ended on March 31, Home Depot The company was expected to report third-quarter earnings per share of $3.60 on revenue of $39.24 billion, according to FactSet's consensus estimates. Although Home Depot's earnings were $0.15 below Wall Street expectations, the market reacted positively to the news that the company doesn't plan to raise prices in response to tariffs. Over the weekend, President Donald Trump criticized Walmart for not absorbing the additional costs associated with ongoing trade talks. 'Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,' Trump During Walmart's first-quarter earnings call last week, CEO Doug McMillon thanked Trump and Treasury Secretary Scott Bessent for the progress made recently on trade talks with China, but stated that the company intends to raise prices due to the impact of tariffs. 'We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren't able to absorb all the pressure given the reality of narrow retail margins,' said McMillon. 'We're positioned to manage the cost pressure from tariffs as well or better than anyone. But even at the reduced levels, the higher tariffs will result in higher prices.' Decker said Home Depot's typical customer is different from other retailers. He stated the company's average customer has an annual income of $110,000 annually, and 80 percent are homeowners. 'Stock markets have recovered. Job and wage growth are strong. So, our customer is in a good spot right now,' he said. Decker also noted that American homeowners have record levels of equity in homes in the nation's aging housing inventory. He said those customers are spending more on smaller home improvement projects that boost equity and improve their home value as the housing market stalls. 'We remain bullish on the fundamentals of home improvement and are confident we are best positioned to win,' Decker said. 'The housing stock is aging and 55 percent of homes are 40 years or older. And we know that as homes get older they require more maintenance and updates. We will continue investing in our business to ensure we are best positioned to gain market share particularly in periods of disruption.' Agreeing with Decker, a Bank of America analyst told The Epoch Times that home improvement spending increased sequentially from 28 percent in April to 32 percent in May. 'Correspondingly, more upper-income respondents expect an increase in home improvement over the next 12 months, rising from 9 percent in April to 14 percent in May with lower-income respondents' expectations remaining flat,' Andrew Didora said via email, citing the bank's monthly consumer survey. In other company highlights, Home Depot's comparable sales decreased 0.3 percent across its 2,350 retail stores in the United States and abroad as foreign exchange rates negatively impacted sales by approximately 70 basis points. However, same-store sales in the United States increased 0.2 percent. Comparable or same-store sales are a key Wall Street metric to gauge how established stores are performing quarterly or yearly compared to new stores. For the quarter, the number of customers visiting the home improvement retailer increased by 2.1 percent to 394.8 million. These customers spent an average of $90.71 per visit, compared with $90.68 per visit in the same quarter last year. In early morning trading, Home Depot
Boston Globe
20-05-2025
- Business
- Boston Globe
Home Depot maintains guidance as US spending holds up
'Our consumers are still telling us that the rate environment remains a consideration, and they tell us they are deferring larger projects for now,' he said, adding that consumer habits remain steady. About 80 percent of Home Depot's customers own homes. Advertisement The company maintained its full-year forecast, which includes the impact of tariffs. Comparable sales were hit by foreign exchange rates, and earnings missed Wall Street expectations. Shares rose 2 percent at 7:10 a.m. in early New York trading. The stock has dropped 2.5 percent so far this year, lagging the performance of the S&P 500 Index. Home Depot had previously signaled an optimistic outlook, but President Donald Trump's fast-changing tariffs have created hurdles and uncertainty. Across the US, prices are expected to rise due to new levies, and consumer sentiment has deteriorated in recent months on fears of an economic fallout. Abrupt changes in trade policy are also making it more challenging for companies to manage their inventories, forecast demand and plan long-term. Advertisement After posting strong quarterly results last week, Walmart Inc. cautioned that tariff-driven price increases are only starting to come into effect. The company reiterated plans to keep prices low, though it said it wouldn't absorb all cost pressures given the magnitude of levies. That drew the ire of Trump, who took to social media over the weekend to say the retailer should 'eat the tariffs.' In response, Walmart said it has kept prices as low as possible and would continue to do so. The quarrel didn't change Home Depot's calculus around prices, McPhail said. The company will continue to focus on its strategy to diversify its supply chain. Home Depot says it sources more than 50 percent of its products in the US. In 12 months, it expects no country outside the US to represent more than 10 percent of its purchases. That will help the retailer to generally keep its current level of pricing, McPhail said, along with efforts to be more efficient across its supply chain. Over the past two years, Home Depot and other housing-focused companies have posted weak sales against the backdrop of high interest rates. Elevated rates have prompted consumers to defer home purchases or projects that need financing, instead prioritizing necessities. The home category is especially vulnerable to tariffs because many products are sourced from overseas, according to industry consultants. They also tend to be discretionary, meaning demand is closely tied to prices. US homebuilder sentiment slumped in May to the lowest level since 2023, as tariffs make it more difficult to price homes and anxious consumers stayed on the sidelines. The retailer is investing to expand its offerings for professional contractors who handle larger, more complex projects, as it broadens digital operations and doubles down on exclusive products. Advertisement Some consumer-facing companies have posted soft reports in recent weeks due to economic disruptions. Floor & Decor Holdings Inc., Procter & Gamble Co. and others slashed their annual outlooks, while airlines have voiced concerns about waning consumer confidence. Other big-box retailers, including Target Corp. to Lowe's Cos., are set to post quarterly reports this week, offering more color on the health of US shoppers. Economists, analysts and executives are looking for clues on when prices will rise from tariffs, by how much and for how long.
Yahoo
20-05-2025
- Business
- Yahoo
Home Depot Plans to Keep Prices Steady Despite Tariffs
Home Depot said it plans to hold the line on prices. The retailer has been pushing to shift production out of China. It is also working with suppliers to keep prices steady despite tariffs, Chief Financial Officer Richard McPhail said in an interview. Migrant Labor Force Withstands Mass-Deportation Push America's Fiscal Situation Threatens the Good Mood on Wall Street Will Anyone Take the Factory Jobs Trump Wants to Bring Back to America? Jamie Dimon Says Tariffs Might Inflict More Economic Pain Than Investors Realize The Big Offshore Wind Project in New York Is Back On Last week, Walmart announced that it would raise prices because of tariffs, prompting President Trump to criticize the company. Walmart and Home Depot kept their financial forecasts for fiscal 2025 unchanged, contrasting with a flurry of companies that have scaled back or suspended their forecasts in response to on-again, off-again tariffs. Suppliers say that Walmart, Home Depot and other retailers have been pushing them to make price concessions or shift production out of China. Some of the haggling has prompted Home Depot suppliers to shift their sourcing outside of China. 'We anticipate that 12 months from now, no single country outside the United States will represent more than 10% of our purchases,' said McPhail. Home Depot's comparable sales in the U.S. ticked up by 0.2%. McPhail said poor weather hurt February sales, but that strong employment levels and home appreciation mean that Home Depot customers—mostly homeowners—continue to have money to spend on home improvement projects. Write to Denny Jacob at Howard Lutnick Transfers Ownership of Cantor Fitzgerald to His Children Crypto Billionaire Accused of Defrauding Creditors, Propelling Industry's 2022 Collapse CBS News Chief to Leave as Tension Persists Over Paramount's Trump Fight Porsche Tried to Be Both Ferrari and Mercedes. With the Trade War, It Struggles to Be Either. 'Sesame Street' Finds a New Home on Netflix
