Home Depot (HD) Q4 2024 Gains

Home Deposit On Tuesday it exceeded quarterly sales expectations of Wall Street, even as high interest rates and housing prices decreased the demand for the consumer of large remodeling and more expensive projects.

Throughout the year ahead, The company said He expects total sales to grow by 2.8% and comparable sales, which eliminate the impact of unique factors such as store openings and calendar differences, to increase by approximately 1%. Adjusted profits projected by Home Depot action will decrease approximately 2% compared to the previous year.

In an interview with CNBC, the financial director Richard McPhail said “Housing It is still frozen by mortgage rates. “However, he said that Home Depot saw wide growth, since sales increased by approximately half of their merchandise categories and 15 of its 19 American geographical regions.

Home Depot anticipates that consumers will stop postponing projects, since gradually Go to higher interest rates, instead of waiting for them to fall, McPhail said.

“They tell us that their lives are moving forward,” he said. “Their families are growing. They are moving for a new job. They are evaluating their home. They want Long -term rates have reached a new normality. “

This is what the company reported for the fourth fiscal quarter compared to Wall Street estimates, according to an LSEG analysts survey:

• Profit per action: $ 3.02 vs. $ 3.01 expected
• Revenue: $ 39.70 billion compared to $ 39.16 billion expected

Home Depot shares increased slightly in trade prior to the market. The company made a profit call on Tuesday morning.

In the three -month period that ended on February 2, the net income of Home Depot rose to $ 3.0 billion, or $ 3.02 per share, from $ 2.80 billion, or $ 2.82 per share, In the previous year. Income increased by 14% of $ 34.79 billion in the period of the previous year.

Comparable sales, a metric also known as sales in the same store, increased 0.8% throughout the company. Those results ended Eight consecutive rooms of falling into comparable sales. They also exceeded the expectations of analysts from a 1.7%decrease, according to streetacount. Comparable sales in the US. increased 1.3% year after year.

The regions affected by Huechene and Milton hurricanes contributed around 0.6% to comparable sales, McPhail said.

Customers spent more and visited the stores and the Home Depot website more in the quarter compared to the period of the previous year. Transactions increased to 400.4 million, almost 8% since the previous period. The average ticket was $ 89.11 in the quarter, a little more than $ 88.87 in the quarter of the previous year.

Home Depot has faced a more difficult backdrop for selling supplies for home improvement projects. Sales growth slowed down in 2023, after consumers’ huge appetite due to household renovations during Pandemia Covid returned to more typical patterns. Inflation and a change of return to spending on services such as vacations and restaurants also sank the demand for consumers of larger projects and more expensive items.

Since mid -2023, Home Depot leaders have set the company’s problems in a harder real estate market. McPhail told CNBC that the same challenge persisted in the fourth quarter, since consumers still showed reluctance to waste larger projects, how to rebuild a kitchen or install new floors.

The mortgage rates have remained high, despite the cuts of interest rates by the Federal Reserve. The average price of a house sold in January It was $ 396,900, 4.8% more The previous year and the highest price for the month of January, according to the National Association of Real Estate Agents.

The hardest climate also harmed the company’s sales in January, and that is carried out in February in some parts of the country, McPhail said.

“Where the weather is good, we continue to see the commitment,” he said. “Where the weather is difficult, projects are put on the shelf.”

Even so, he said that Home Depot has focused on the ways in which he can move the needle, such as opening new stores and investing in his electronic commerce business.

Online sales increased 9% in the fourth quarter compared to the period of the previous year, said McPhail, the strongest quarter of the year for the digital business of Home Depot. He attributed it to the company’s investments in faster deliveries, particularly with the obtaining of household appliances and tools to customers.

McPhail said Home Depot opened 12 new stores in 2024, and plans to open 13 new locations in next year.

Home Depot also has He looked at home professionals As one of its main sales drivers. He bought SRS distributionA company based in Texas that sells supplies to professionals in the businesses of ceilings, swimming pools and landscaping, for $ 18.25 billion last year. It marked the greatest acquisition in the company’s history.

Some pro-peses categories, such as ceilings, plaster and wood panels, saw sales increases in the quarter due to Home Depot’s impulse to better serve the contractors and other home professionals, McPhail said.

Home Depot shares closed on Monday at $ 382.42. As of Monday, the company’s shares have fallen around 2% so far this year. That is traced behind the profits of approximately 2% of S&P 500 during the same period.

This is a development story. Consult the updates again.