Core Viewpoint - Home Depot is positioned for a potential rebound in the coming year despite facing operational challenges and declining same-store sales over the past quarters [1][2]. Sales Performance - Home Depot's same-store sales have declined for eight consecutive quarters, with a 1.3% drop in Q3 2024, which was better than the expected 3.3% decline [3][5]. - The U.S. same-store sales growth also reflected a similar trend, with a 3.5% decline in Q3 2023 [3]. Revenue and Earnings - The company's overall revenue increased by 6.6% to $40.2 billion, aided by the acquisition of SRS Distribution, while adjusted earnings per share (EPS) fell by 2% to $3.78, surpassing analysts' expectations [5]. - Management revised its full-year same-store sales guidance to a decline of 2.5%, an improvement from the previous forecast of a 3% to 4% decline [6]. Market Conditions - The home improvement sector has faced challenges due to the pandemic's impact on demand, inflation, and rising interest rates, which have slowed housing turnover to its lowest level in 30 years [8]. - The Federal Reserve's recent interest rate cuts and pent-up demand in home improvement are expected to benefit Home Depot in 2025 [9]. Future Outlook - Remodeling activity is projected to return to growth in the second half of 2025, with Home Depot likely to outperform this trend [10]. - The stock is currently trading at a price-to-earnings (P/E) ratio of approximately 27, indicating it is not undervalued, but potential operating leverage could lead to earnings growth as same-store sales improve [11].

Core Insights - Home Depot's acquisition of SRS Distribution for $18.25 billion marks a strategic shift towards catering to professional contractors and expanding its market presence beyond traditional retail [3][10][12] - The deal is expected to enhance Home Depot's sales, contributing approximately $6.4 billion in incremental sales this year, despite a challenging home improvement market [17][4] - Home Depot aims to leverage SRS's specialized product offerings and logistics capabilities to strengthen its position in the professional market [18][20] Company Strategy - Home Depot's acquisition of SRS is part of a broader strategy to increase sales to professional contractors, which currently account for about 50% of its business compared to 20%-25% at competitors like Lowe's [14][15] - The acquisition is seen as an opportunity to enter a new market with an established player, potentially accelerating growth in the professional segment [9][10] - Home Depot plans to maintain its focus on do-it-yourself sales while integrating SRS's operations to enhance overall business performance [17][22] Market Impact - The acquisition is projected to expand Home Depot's total addressable market by approximately $50 billion, bringing it to around $1 trillion [8] - SRS's established logistics network and dedicated sales force are expected to improve delivery efficiency and customer service for professional clients [18][20] - The deal comes at a time when housing turnover is low, but Home Depot is optimistic about future growth as interest rates decline [11][14] Operational Synergies - Home Depot is beginning to see synergies from the acquisition, including the integration of SRS's logistics capabilities with its own distribution network [18][21] - SRS's specialized sales force and product catalog are anticipated to enhance Home Depot's offerings to professional customers [20][19] - The collaboration aims to utilize Home Depot's existing infrastructure to support SRS's growth while allowing SRS to operate independently [22][23]

Core Viewpoint - Home Depot reported mixed financial results for Q3, with revenue growth driven by hurricane-related demand, but a decline in net earnings and comparable sales due to rising interest rates and economic uncertainty [2][3][7]. Financial Performance - Home Depot's net sales increased by 7% year-over-year to $40.2 billion, while adjusted EPS fell by 4.3% year-over-year to $3.78, surpassing estimates [2]. - The company's operating margin decreased by 800 basis points year-over-year to 13.5%, attributed to increased supply chain investments [3]. - For FY 2024, Home Depot anticipates a 2.5% decline in comparable sales but expects total revenue to rise by 4%, driven by acquisitions and infrastructure improvements [7][8]. Market Conditions - Rising interest rates have led to higher mortgage rates, which have suppressed home sales, with the 30-year fixed-rate mortgage averaging 6.79% as of November 11, up from 6.08% the previous year [4]. - The decline in home prices may negatively impact Home Depot in the short term, but the company is well-positioned for long-term growth due to its strong sales from professional contractors [5]. Stock Performance - Home Depot's stock has shown volatility over the past three years, with annual returns of 60% in 2021, -22% in 2022, and 13% in 2023, contrasting with the more stable performance of the Trefis High Quality Portfolio [6]. - The revised valuation for Home Depot is set at $404 per share, based on an expected EPS of $14.84 and a P/E multiple of 27.2x for FY 2024, aligning closely with the current market price [8].

The 2024 Q3 earnings season is slowly winding down, with just a small chunk of S&P 500 members yet to reveal their quarterly results. The period has so far been positive, with earnings growth remaining positive on the back of a strong showing from Technology yet again.Below is a chart illustrating the overall earnings picture on a quarterly basis.Image Source: Zacks Investment ResearchStay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Recently, we heard from home improvement giant Home ...

ATLANTA, Nov. 14, 2024 /PRNewswire/ -- The Home Depot®, the world's largest home improvement retailer, today announced that its board of directors declared a third-quarter cash dividend of $2.25 per share. The dividend is payable on December 12, 2024, to shareholders of record on the close of business on November 27, 2024. This is the 151st consecutive quarter the company has paid a cash dividend.The Home Depot is the world's largest home improvement specialty retailer. At the end of the third quarter, the ...

Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>Here are the key points:Total Q3 earnings for the 458 S&P 500 members that have reported results through Wednesday, November 13th, are up +6.9% on +5.4% higher revenues, with 73.6% beating EPS estimates and 61.4% beating revenue estimates. The earnings and revenue growth pace for this group ...

Home Depot Inc HD released its third-quarter earnings report Tuesday, posting revenue and EPS beats, aided by recent bouts of extreme weather. Analysts are still bullish on the Atlanta, Georgia-based company.Home Depot Analysts: The following analysts published notes on Tuesday:Goldman Sachs analyst Kate McShane reiterated a Buy rating for Home Depot, raising its price target from $384 to $410.J.P. Morgan analyst Christopher Horvers reiterated an Overweight rating for Home Depot, raising its price target fr ...

Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or ...

Home Depot said retail theft continues to be a challenge.CFO Richard McPhail said the operating environment is "getting harder and harder."However, the executive said investments to combat shoplifting and organized theft "are paying off." Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Go to newsletter preferences Thanks for signing up! Access your favorite topics in a personalized feed while you're on ...

The Home Depot Inc. (HD) has reported third-quarter fiscal 2024 results, wherein earnings and sales surpassed the Zacks Consensus Estimate. Meanwhile, the company’s top line improved year over year in the third quarter of fiscal 2024, while earnings per share declined year over year.Home Depot's adjusted earnings of $3.78 per share declined 1.8% from $3.85 in the year-ago quarter. However, the bottom line beat the Zacks Consensus Estimate of $3.65.Find the latest EPS estimates and surprises on Zacks Earning ...