Extra Week Boosts Home Depot in Q4

Core Viewpoint - Home Depot's fourth-quarter financial results show a revenue increase of 14%, but the underlying economic challenges persist, impacting comparable-store sales and profitability [3][4][6]. Financial Performance - Revenue for Q4 FY24 was $39.7 billion, up from$34.8 billion in Q4 FY23, representing a 14% increase and beating expectations [2]. - Adjusted earnings per share rose to $3.13 from$2.86, a 9% increase, also exceeding expectations [2]. - Operating margin decreased to 11.3% from 11.9%, a decline of 60 basis points [2]. Comparable-Store Sales - Comparable-store sales increased by 0.8% in Q4, with U.S. stores performing slightly better at 1.3% [5]. - For the full year, comparable-store sales were down 1.8%, indicating ongoing challenges in consumer traffic [5]. Economic Environment - The challenging macroeconomic environment, characterized by rising interest rates, has negatively impacted the housing market and home improvement spending [3][10]. - Operating expenses grew faster than revenue, with selling, general, and administrative expenses increasing by 15.7% in Q4 and 8.1% for the year [7]. Market Reaction - Shares showed a slight increase in premarket trading, reflecting that results were in line with investor expectations [8]. Future Outlook - Management projects revenue growth of just below 3% for 2025, with comparable-store sales expected to rise about 1% [9]. - The company plans to open 13 new stores to drive revenue growth, but profitability is expected to remain under pressure, with operating margin forecasted to decline to 13% [9].