Yahoo Finance Here's How Home Depot (HD) Is Placed Just Before Q1 Earnings
Home Depot, Inc. HD is set to report first-quarter fiscal 2024 results on May 14, before market open. Its top and bottom lines are likely to have declined year over year in the to-be-reported quarter. The Zacks Consensus Estimate for the company’s fiscal first-quarter earnings of $3.61 per share indicates a decline of 5.5% from the year-ago period’s reported figure. The consensus estimate has been unchanged in the past 30 days.
The consensus mark for quarterly revenues is pegged at $36.7 billion, indicating a decline of 1.5% from that reported in the year-ago quarter.
In the last reported quarter, the company delivered an earnings surprise of 1.8%. The leading home improvement retailer delivered a trailing four-quarter average earnings surprise of 1.98%.
The Home Depot, Inc. Price and EPS Surprise
The Home Depot, Inc. price-eps-surprise | The Home Depot, Inc. Quote
Key Factors to Note
Home Depot’s first-quarter fiscal 2024 performance is likely to have been affected by soft consumer spending trends due to rising inflation, normalized transactions and continued investments to capture market share. On the last reported quarter’s earnings call, the company noted that transactions gradually normalized as consumer spending shifted from goods to services.
The company has been witnessing continued pressure in some big-ticket, discretionary categories, a trend, which started in fourth-quarter fiscal 2022. The deflation of core commodity categories, particularly in lumber prices, has been affecting the top-line performance. We expect this trend to have continued in the fiscal first quarter, affecting its sales performance.
Moreover, the company’s fiscal first-quarter results are expected to reflect the continued negative impacts of lumber deflation, leading to soft comps.
We expect comps to decline 2.3% in first-quarter fiscal 2024 due to continued headwinds related to lumber and copper deflation.
However, Home Depot has been witnessing favorable trends, with the Pro segment mainly driving sales for the past several quarters. Pro sales outpaced DIY sales in third-quarter fiscal 2023. Although lower than the year-ago quarter's reported level, the company noted that Pro backlogs continued to be healthy and elevated relative to historic trends. Continued growth in the Pro business is likely to have aided the top line in the to-be-reported quarter.
Additionally, Home Depot has been seeing significant benefits from the execution of its “One Home Depot” plan, focused on expanding the supply chain, technology investments and digital enhancements. The company’s interconnected retail strategy and underlying technology infrastructure have consistently been boosting web traffic for the past few quarters. This is expected to have aided digital sales in the to-be-reported quarter.
HD is expected to have witnessed growth in the Pro and DIY customer categories, and digital momentum in the fiscal first quarter.
Zacks Model
Our proven model does not conclusively predict an earnings beat for Home Depot this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Home Depot has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell) at present.
Stocks With the Favorable Combination
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this reporting cycle.
The TJX Companies TJX currently has an Earnings ESP of +2.50% and a Zacks Rank #2. TJX is likely to register top and bottom-line growth when it reports first-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $12.5 billion, indicating 5.8% growth from that reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TJX’s fiscal first-quarter earnings is pegged at 87 cents, indicating 14.5% growth from the year-ago quarter's actuals. The consensus mark has been unchanged in the past 30 days.
Dollar General DG currently has an Earnings ESP of +1.88% and a Zacks Rank #3. DG is likely to register top-line growth when it reports first-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $9.9 billion, implying 5.6% growth from that reported in the prior-year quarter.
The Zacks Consensus Estimate for DG’s fiscal first-quarter earnings is pegged at $1.57 per share, indicating a year-over-year decline of 32.9%. The consensus mark has been unchanged in the past 30 days.
Ross Stores ROST currently has an Earnings ESP of +1.63% and a Zacks Rank #3. The company is likely to register top and bottom-line growth when it reports first-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $4.82 million, indicating 7.3% growth from that reported in the prior-year quarter.
The Zacks Consensus Estimate for Ross Stores’ fiscal first-quarter earnings is pegged at $1.34 per share, indicating 22.9% growth from that reported in the year-ago quarter. The consensus mark has been unchanged in the past 30 days.
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The TJX Companies, Inc. (TJX) : Free Stock Analysis Report
Dollar General Corporation (DG) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
Ross Stores, Inc. (ROST) : Free Stock Analysis Report
