Home Depot's Earnings: What to Expect as the Retail Giant Reports

Home Depot (HD) is set to report its fourth-quarter earnings before the bell on Tuesday, February 25, 2025. As the world's largest home improvement retailer, Home Depot's performance is closely watched by investors and analysts alike. Here's what to expect from the company's earnings report.



Earnings and Revenue Expectations

Analysts expect Home Depot to report adjusted earnings per share (EPS) of $3.00 for the quarter, up from $2.82 in the same period last year. Revenue is expected to come in at $39.12 billion, a significant increase from the $34.79 billion reported in the fourth quarter of 2023.



Key Drivers and Challenges

Home Depot's focus on the professional contractor market, as evidenced by the acquisition of SRS Distribution, is expected to drive growth. The acquisition, announced in March 2024, is expected to close by the end of the fiscal year and will provide Home Depot with access to a network of contractors, enabling it to distribute roofing materials and other construction products more efficiently.

However, macroeconomic factors such as inflation and interest rates have impacted Home Depot's sales growth. In previous quarters, the company has reported a decline in big-ticket transactions, defined as those over $1,000, as consumers put off larger purchases or home improvement projects due to economic uncertainty.

Analyst Sentiment and Price Targets

Eight of the 11 analysts who follow Home Depot tracked by Visible Alpha have issued "buy" or equivalent ratings, with three "hold" ratings. Their average price target of $433 is about 13% above Monday's intraday price, indicating a bullish outlook on the company's prospects.



Comparable Store Sales and Outlook

Analysts also forecast a slight decline in Home Depot's comparable store sales, which have been affected by inflation and interest rates. However, the company is expected to maintain its focus on growing its market share among professional contractors and expanding its footprint by opening new stores and warehouses.

In conclusion, Home Depot's earnings report is expected to provide valuable insights into the company's performance and growth prospects. Despite challenges posed by macroeconomic factors, the company's focus on the professional contractor market and expansion efforts are expected to drive growth. Investors and analysts will be closely watching the company's earnings and revenue figures, as well as its outlook for the coming year.