Latest news with #TedDecker
Axios
14 hours ago
- Business
- Axios
Home Depot's big-ticket sales pick up despite tariffs and interest rates
Home Depot reported worse-than-expected sales in its most recent quarter, but the company's big-ticket items picked up momentum despite tariffs and elevated interest rates applying pressure to the home improvement industry. Why it matters: Home Depot's performance is reflective of the status of the American housing market and the broader economy. Driving the news: The Atlanta-based retailer posted a 1% increase in comparable sales for the second quarter, trailing consensus estimates of 1.5%, according to Bank of America analysts. Total customer transactions fell 0.9%, but the average ticket size rose by 1.2%. The company maintained its full-year sales and earnings guidance. Zoom in: Home Depot recorded a 2.6% increase in comparable purchases of more than $1,000, CEO Ted Decker said on an earnings call. "These may be shallow gains, but they show a material strengthening over the last quarter and provide confidence that the slump in home improvement is finally over," GlobalData analyst Neil Saunders wrote Tuesday. The company's stock was up 3.6% in morning trading. The big picture: The earnings release came the same day the federal government reported that U.S. housing starts hit a seasonally adjusted five-month high of 1.428 million units in July. Yes, but: Tariffs and interest rates continue to undermine remodelers and home builders. "Our customers still tell us that the rate environment is giving them pause on larger remodeling projects that would typically require debt financing," Home Depot's chief financial officer, Richard McPhail, said on the earnings call. But the retailer's professional customers say "their customers tell them they're deferring projects, they're not canceling projects," McPhail added. What to watch: Tariffs will lead to "some modest price movement in some categories, but it won't be broad based," William Bastek, executive VP of merchandising, said on the earnings call.
Yahoo
17 hours ago
- Business
- Yahoo
Home Depot (NYSE:HD) Posts Q2 Sales In Line With Estimates
Home improvement retail giant Home Depot (NYSE:HD) met Wall Street's revenue expectations in Q2 CY2025, with sales up 4.9% year on year to $45.28 billion. Its non-GAAP profit of $4.68 per share was in line with analysts' consensus estimates. Is now the time to buy Home Depot? Find out in our full research report. Home Depot (HD) Q2 CY2025 Highlights: Revenue: $45.28 billion vs analyst estimates of $45.27 billion (4.9% year-on-year growth, in line) Adjusted EPS: $4.68 vs analyst expectations of $4.69 (in line) Full year 2025 guidance largely reaffirmed Operating Margin: 14.5%, in line with the same quarter last year Free Cash Flow Margin: 8.2%, down from 10.9% in the same quarter last year Locations: 2,353 at quarter end, up from 2,340 in the same quarter last year Same-Store Sales rose 1% year on year (-3.3% in the same quarter last year) Market Capitalization: $392.7 billion "Our second quarter results were in line with our expectations. The momentum that began in the back half of last year continued throughout the first half as customers engaged more broadly in smaller home improvement projects," said Ted Decker, chair, president and CEO. Company Overview Founded and headquartered in Atlanta, Georgia, Home Depot (NYSE:HD) is a home improvement retailer that sells everything from tools to building materials to appliances. Revenue Growth Reviewing a company's long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. With $165.1 billion in revenue over the past 12 months, Home Depot is a behemoth in the consumer retail sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because it's harder to find incremental growth when you've penetrated most of the market. To accelerate sales, Home Depot likely needs to optimize its pricing or lean into international expansion. As you can see below, Home Depot's sales grew at a tepid 7% compounded annual growth rate over the last six years (we compare to 2019 to normalize for COVID-19 impacts) as it didn't open many new stores. This quarter, Home Depot grew its revenue by 4.9% year on year, and its $45.28 billion of revenue was in line with Wall Street's estimates. Looking ahead, sell-side analysts expect revenue to grow 1.4% over the next 12 months, a deceleration versus the last six years. This projection doesn't excite us and suggests its products will see some demand headwinds. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories. Store Performance Number of Stores A retailer's store count often determines how much revenue it can generate. Home Depot operated 2,353 locations in the latest quarter, and over the last two years, has kept its store count flat while other consumer retail businesses have opted for growth. When a retailer keeps its store footprint steady, it usually means demand is stable and it's focusing on operational efficiency to increase profitability. Same-Store Sales The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year. Home Depot's demand has been shrinking over the last two years as its same-store sales have averaged 1.6% annual declines. This performance isn't ideal, and we'd be concerned if Home Depot starts opening new stores to artificially boost revenue growth. In the latest quarter, Home Depot's same-store sales rose 1% year on year. This growth was a well-appreciated turnaround from its historical levels, showing the business is regaining momentum. Key Takeaways from Home Depot's Q2 Results Revenue and EPS were both in line, which is not too exciting. Full-year 2025 guidance was largely reaffirmed. The stock traded down 1.7% to $388 immediately following the results. The latest quarter from Home Depot's wasn't that good. One earnings report doesn't define a company's quality, though, so let's explore whether the stock is a buy at the current price. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it's free.
18 hours ago
- Business
Home Depot's sales improve as customers stay focused on smaller projects
Home Depot's sales improved during its fiscal second quarter as consumers remained focused on smaller projects amid cost concerns and economic uncertainty, but its performance missed Wall Street's expectations. Revenue for the three months ended August 3 climbed to $45.28 billion from $43.18 billion, but fell short of the $45.41 billion that analysts polled by FactSet were looking for. Sales at stores open at least a year, a key indicator of a retailer's health, rose 1%. In the U.S., comparable store sales increased 1.4%. Neil Saunders, managing director of GlobalData, said that Home Depot saw consumers concentrating on smaller projects and gardening during the quarter. 'As the largest improvement player, Home Depot is getting the lion's share of this growth and remains the number one destination for consumers due to strong customer service, a comprehensive range, and sharp pricing,' he said. 'The latter factor will serve it well as consumers become more price conscious.' Customer transactions declined less than 1% in the quarter. The amount shoppers spent rose to $90.01 per average receipt from $88.90 in the prior-year period. 'Our second quarter results were in line with our expectations," Chair and CEO Ted Decker said in a statement on Tuesday. "The momentum that began in the back half of last year continued throughout the first half as customers engaged more broadly in smaller home improvement projects.' Home improvement retailers like Home Depot have been dealing with homeowners putting off bigger projects because of increased borrowing costs and lingering concerns about inflation. The U.S. housing market has been in a sales slump dating back to 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied homes have slumped as elevated mortgage rates and rising prices discourage home shoppers. Sales of such homes in the U.S. slid in June to the slowest pace since last September as mortgage rates remained high and the national median sales price climbed to an all-time high of $435,300. Home sales fell last year to their lowest level in nearly 30 years. Home Depot earned $4.55 billion, or $4.58 per share, for the second quarter. A year ago, the Atlanta-based company earned $4.56 billion, or $4.60 per share. Removing certain items, earnings were $4.68 per share. Wall Street was looking for earnings of $4.72 per share. The company reaffirmed its fiscal 2025 forecast for total sales growth of about 2.8%. It still expects adjusted earnings to decline about 2% from $15.24 per share a year earlier.
The Hill
18 hours ago
- Business
- The Hill
Home Depot's sales improve as customers stay focused on smaller projects
Home Depot's sales improved during its fiscal second quarter as consumers remained focused on smaller projects amid cost concerns and economic uncertainty, but its performance missed Wall Street's expectations. Revenue for the three months ended August 3 climbed to $45.28 billion from $43.18 billion, but fell short of the $45.41 billion that analysts polled by FactSet were looking for. Sales at stores open at least a year, a key indicator of a retailer's health, rose 1%. In the U.S., comparable store sales increased 1.4%. Customer transactions declined less than 1% in the quarter. The amount shoppers spent rose to $90.01 per average receipt from $88.90 in the prior-year period. 'Our second quarter results were in line with our expectations,' Chair and CEO Ted Decker said in a statement on Tuesday. 'The momentum that began in the back half of last year continued throughout the first half as customers engaged more broadly in smaller home improvement projects.' Home improvement retailers like Home Depot have been dealing with homeowners putting off bigger projects because of increased borrowing costs and lingering concerns about inflation. The U.S. housing market has been in a sales slump dating back to 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied homes have slumped as elevated mortgage rates and rising prices discourage home shoppers. Sales of such homes in the U.S. slid in June to the slowest pace since last September as mortgage rates remained high and the national median sales price climbed to an all-time high of $435,300. Home sales fell last year to their lowest level in nearly 30 years. Home Depot earned $4.55 billion, or $4.58 per share, for the second quarter. A year ago, the Atlanta-based company earned $4.56 billion, or $4.60 per share. Removing certain items, earnings were $4.68 per share. Wall Street was looking for earnings of $4.72 per share. The company reaffirmed its fiscal 2025 forecast for total sales growth of about 2.8%. It still expects adjusted earnings to decline about 2% from $15.24 per share a year earlier.
Yahoo
18 hours ago
- Business
- Yahoo
Home Depot's sales improve as customers stay focused on smaller projects
Home Depot's sales improved during its fiscal second quarter as consumers remained focused on smaller projects amid cost concerns and economic uncertainty, but its performance missed Wall Street's expectations. Revenue for the three months ended August 3 climbed to $45.28 billion from $43.18 billion, but fell short of the $45.41 billion that analysts polled by FactSet were looking for. Sales at stores open at least a year, a key indicator of a retailer's health, rose 1%. In the U.S., comparable store sales increased 1.4%. Customer transactions declined less than 1% in the quarter. The amount shoppers spent rose to $90.01 per average receipt from $88.90 in the prior-year period. 'Our second quarter results were in line with our expectations," Chair and CEO Ted Decker said in a statement on Tuesday. "The momentum that began in the back half of last year continued throughout the first half as customers engaged more broadly in smaller home improvement projects.' Home improvement retailers like Home Depot have been dealing with homeowners putting off bigger projects because of increased borrowing costs and lingering concerns about inflation. The U.S. housing market has been in a sales slump dating back to 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied homes have slumped as elevated mortgage rates and rising prices discourage home shoppers. Sales of such homes in the U.S. slid in June to the slowest pace since last September as mortgage rates remained high and the national median sales price climbed to an all-time high of $435,300. Home sales fell last year to their lowest level in nearly 30 years. Home Depot earned $4.55 billion, or $4.58 per share, for the second quarter. A year ago, the Atlanta-based company earned $4.56 billion, or $4.60 per share. Removing certain items, earnings were $4.68 per share. Wall Street was looking for earnings of $4.72 per share. The company reaffirmed its fiscal 2025 forecast for total sales growth of about 2.8%. It still expects adjusted earnings to decline about 2% from $15.24 per share a year earlier. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
