Home Depot Q1 Sales Beat Estimates, Stock Dips 2% on Earnings Miss

Core Viewpoint - Home Depot's first-quarter fiscal 2025 results showed a decline in earnings but an increase in sales, indicating mixed performance amid ongoing customer engagement and seasonal events [1][2]. Financial Performance - Adjusted earnings per share were $3.56, down 3$3.67 in the previous year, missing the Zacks Consensus Estimate of $3.59 [2]. - Net sales increased by 9.4$39.86 billion from $36.42 billion year over year, surpassing the consensus estimate of$39.14 billion [2]. - Comparable sales decreased by 0.3%, with U.S. comparable sales rising by 0.2% [5]. Customer Engagement - Customer transactions improved by 2.1% year over year, while the average ticket remained flat [5]. - The company is optimistic about its initiatives to enhance customer experience and expand market share in the home improvement sector [4]. Cost and Margin Analysis - Gross profit rose by 8.3% year over year to $13.5 billion, but gross margin declined by 30 basis points to 33.8$7.5 billion, with SG&A as a percentage of sales growing by 60 basis points to 18.9% [7]. Future Outlook - Home Depot anticipates a 2.8% increase in sales and a 1% rise in comparable sales for fiscal 2025 [10]. - The company estimates a gross margin of 33.4% and an operating margin of 13% for fiscal 2025, with GAAP earnings per share expected to decline by 3% year over year [11][12].