Core Viewpoint - Wells Fargo analyst has lowered Home Depot's price target from $450 to $445 while maintaining an overweight rating, indicating a potential recovery in the housing-improvement market [1] Group 1: Company Performance - Home Depot's comparable sales increased by 0.8% in the fourth quarter, with comparable transactions up 0.6% and average ticket price up 0.2% [3] - Management expects 1% comparable sales growth for 2025, aligning with the outlook from rival Lowe's, which reported a 0.2% increase in comparable sales for its fourth quarter [2][3] Group 2: Market Outlook - The market is looking for a turning point that could lead to sustained growth, despite current sales figures being modest [4] - The housing recovery is anticipated to occur eventually, potentially aided by easier comparisons with previous years [4] Group 3: Investment Considerations - The thesis of "buying the housing recovery" is acknowledged, but Home Depot's valuation at 26 times estimated 2025 earnings raises questions about its risk-reward profile [5] - Home Depot may be a lower-risk investment option, but other housing-related stocks offer lower valuations and potentially higher upside for bullish investors [6]

Core Viewpoint - Home Depot's stock increased by 2.8% despite weak fiscal 2024 results and conservative fiscal 2025 guidance, indicating potential resilience in the face of industry challenges [1] Dividend Growth - Home Depot has historically experienced rapid dividend and earnings growth over the past 15 years, but recent years have shown a slowdown in earnings growth [2][3] - The latest dividend increase of 2.2% is the smallest since 2010, reflecting the company's ongoing downturn [3] - The payout ratio has risen to 60%, higher than the average over the last 15 years, but still considered healthy for an industry leader [4] Earnings Expectations - Home Depot is projecting only 2.8% total sales growth and a 1% increase in comparable sales for fiscal 2025, with diluted EPS expected to decline by 3% [7] - Fiscal 2024 diluted EPS was $14.91, and the expected EPS for fiscal 2025 is $14.94, indicating a stagnation in earnings compared to previous years [8] Market Context - The company's weak performance is attributed to broader industry challenges, including high interest rates and reduced consumer spending, rather than management execution [9][10] - Despite the lack of growth, Home Depot's earnings have not significantly declined, suggesting stability during the cyclical slowdown [11] Long-term Strategy - Home Depot continues to invest in long-term growth opportunities, such as the acquisition of SRS Distribution for $18.25 billion and the opening of 13 new stores in fiscal 2025 [14] - The company is positioned to benefit from a potential recovery in the home improvement industry, making it a viable option for long-term investors [15]

Core Viewpoint - Home Depot has demonstrated resilience and growth despite challenges in the housing market, reporting positive comparable sales growth and strong revenue figures, indicating a potential recovery phase for the company [3][4][6]. Group 1: Financial Performance - Home Depot's overall revenue increased by 14.1% to $39.7 billion, surpassing estimates of $39.07 billion, aided by an extra week in the quarter and the acquisition of SRS Distribution [4]. - Adjusted earnings per share rose from $2.86 to $3.13, exceeding the consensus estimate of $3.04; without the extra week, EPS would have been $2.83 [5]. - Comparable sales growth returned, with overall comps rising 0.8% and U.S. comps up 1.3%, marking a significant inflection point for the company [4]. Group 2: Future Outlook - Home Depot anticipates comparable sales growth of 1% and total sales growth of 2.8% for the upcoming period, reflecting some benefits from the SRS Distribution acquisition [7]. - The company expects adjusted earnings per share to decline by 2% to $15.24, influenced by investments in the business and the lower-margin nature of SRS Distribution [7]. - Long-term prospects remain positive due to expected improvements in the housing market and potential decreases in interest rates, which could stimulate home improvement spending [11][12]. Group 3: Strategic Acquisitions - The acquisition of SRS Distribution for $18.25 billion has expanded Home Depot's market reach and strengthened its position with professional customers, providing cross-sell opportunities [8]. - SRS Distribution is projected to outperform Home Depot's core business with mid-single-digit organic sales growth, continuing to operate under the same management team and pursuing its own acquisitions [9]. Group 4: Investment Considerations - Despite a conservative earnings growth forecast and a modest 2.2% dividend increase, Home Depot remains a strong long-term investment due to its profitability and market leadership [10][12]. - The stock is trading at a price-to-earnings ratio of 27, which, while not cheap, is considered reasonable for a leading company in its category [12].

Core Viewpoint - Home Depot has reported a positive same-store sales growth for the first time since Q3 2022, indicating a potential turnaround in performance after a prolonged period of decline [1][4]. Sales Performance - Home Depot achieved a 0.8% increase in same-store sales for fiscal Q4, surpassing analysts' expectations of a 1.7% decline [4][5]. - U.S. same-store sales rose by 1.3%, with a 0.6% increase in the number of transactions and a 0.2% rise in average ticket size, primarily driven by higher prices of lumber and copper wire [4][5]. - Ten out of Home Depot's 16 product categories reported positive comparable sales growth, with strength noted in appliances, building materials, and lumber [6]. Financial Results - Overall revenue increased by 14% to $39.7 billion, aided by an extra week in the quarter and the acquisition of SRS Distribution [7]. - Adjusted earnings per share (EPS) rose by 7% to $3.02, exceeding analyst consensus estimates of $3.01 [7]. Future Outlook - Home Depot forecasts a revenue growth of 2.8% and a 1% increase in same-store sales for the upcoming period, with adjusted EPS expected to decline by about 2% [8]. - The company plans to open 13 new stores in 2025 [8]. Market Conditions - The housing environment is expected to remain challenging, with no significant rebound in new housing starts or existing home turnover anticipated [10]. - High interest rates are likely to continue impacting large home remodeling projects, which are often financed [10][11]. Valuation - Home Depot's stock is trading at a price-to-earnings (P/E) ratio of approximately 26 and a forward P/E of 25.8 based on 2025 estimates, indicating a high valuation relative to historical metrics [12].

Home Depot (HD 1.62%) has been experiencing a multiyear slowdown. Its latest earnings report and commentary from the earnings call suggest that Home Depot will not see a recovery in the housing market or home improvement projects anytime soon.Here's why the retailer is a useful barometer for consumer spending and the housing market and why Home Depot, despite being in a cyclical slowdown, is still a dividend stock that is worth buying now. Home Depot's growth has ground to a haltWith a market cap of more th ...

Core Viewpoint - Both Home Depot (HD) and Lowe's (LOW) have shown positive year-over-year comparable sales growth for the first time in eight periods, indicating a potential recovery in the home improvement market [3][4][17]. Group 1: Quarterly Results - Home Depot's comparable store sales increased by 0.8% year-over-year, with U.S. comparable sales rising by 1.3% [4]. - Lowe's comparable store sales rose by 0.2% year-over-year, surpassing the consensus estimate of a -1.4% decline [5][4]. - Both companies have reported their second consecutive positive readings on comparable sales, suggesting improving performance in existing locations [8][4]. Group 2: Valuation - Lowe's shares are trading at a lower forward 12-month earnings multiple compared to Home Depot, with a significantly lower PEG ratio [10]. - Lowe's is projected to achieve a 4.3% year-over-year EPS growth this fiscal year, while Home Depot is expected to see only 1.6% growth [10]. - Given the current PEG ratios, Lowe's valuation appears more attractive [10]. Group 3: Estimate Revisions - Analysts have revised EPS expectations more negatively for Home Depot compared to Lowe's following the latest earnings releases [12][16]. - The stability in Lowe's earnings picture is viewed positively, while the downward revisions for Home Depot raise concerns [16]. - Top line revisions for both companies' upcoming earnings reports have been marginally positive [16]. Group 4: Overall Outlook - Despite near-term uncertainties in the home improvement market, the positive change in comparable sales for both companies suggests potential momentum [17]. - Lowe's shares are currently considered the better investment based on valuation, forecasted EPS growth, and a more favorable earnings outlook following recent results [18].

Core Insights - Lowe's and Home Depot have reported a return to comparable store growth in Q4 2024, marking the first positive growth in over a year, indicating end-market strength and operational efficiencies [1][4][8] - Organic growth is expected to continue into 2025, supported by increased store counts, enhancing shareholder value and capital returns [2][12] Financial Performance - Lowe's net revenue for Q4 was $18.55 billion, a decrease of 0.3% year-over-year, but $0.26 billion better than analyst consensus [5] - The company experienced gross margin pressure but improved operational efficiencies led to an 80 basis-point increase in operating margin and a 58-point increase in net margin [6] - Earnings increased by $0.15 or 840 basis points annually, outperforming adjusted expectations by 500 basis points, providing strong cash flow for debt reduction and shareholder returns [7] Market Outlook - Guidance for 2025 indicates continued growth, including comparable store growth, although less than analysts' predictions, which has created a buying opportunity in the market [8] - Analysts maintain a bullish outlook for Lowe's stock, with price targets ranging from $282 to $305, indicating potential upside of 7% to 17% [12][14] Capital Management - The company has reduced its share count by 2.7% in 2024 through a slower pace of buybacks, allowing for significant debt reduction [11] - The dividend remains safe and reliable, expected to grow annually, with a payout ratio under 40% of earnings [11] Technical Analysis - The stock market showed a favorable technical action with a 3.5% rise in premarket trading, confirming support at critical levels and aligning with an uptrend [13] - Institutional buying activity has reached multi-year highs, indicating strong demand for Lowe's stock ahead of earnings releases [14]

Financial Data and Key Metrics Changes - Fourth quarter sales at comparable stores decreased by 5.8%, primarily due to lower store traffic, partially offset by a modest improvement in average order value [16][37] - For the year, sales at comparable stores decreased by 7.8%, attributed to softer store traffic influenced by elevated interest rates affecting existing home sales and demand for home improvement projects [37] - Gross margin rate decreased by 50 basis points to 64.2% in Q4 2024, due to elevated inventory write-offs from product transitions, though partially offset by efforts to source products at lower price points [18][38] - For the year, gross margin rate improved by 130 basis points to 65.7%, driven by stabilizing international freight rates and reduced inventory purchasing costs [39] Business Line Data and Key Metrics Changes - Sales volumes of the Superior product line improved in Q4 2024, following the relaunch of the private label Superior line of installation products in June [10][31] - Despite year-over-year declines in tile volumes sold, growth in Superior volumes was noted during the second half of 2024, providing a tailwind for future growth [12][32] - The company is expanding its selection of entry-level competitively priced products to attract a wider customer base, particularly those on a budget [13][32] Market Data and Key Metrics Changes - Existing home sales levels remain near historic lows, impacting demand for home improvement projects [7][28] - The company anticipates that the changing political landscape and new policies will affect tariffs, consumer sentiment, and jobs, which are critical for housing turnover and remodeling activity [7][28] Company Strategy and Development Direction - The company plans to be selective with incremental investments in 2025 and does not intend to open new stores, instead focusing on closing two unprofitable stores [9][30] - The strategy includes curating a strong assortment of tile products and providing exceptional service to differentiate from competitors [14][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the industry but remains optimistic about a potential recovery in housing turnover and remodeling demand [7][28] - The company ended the year with no debt and $21 million in cash, positioning itself strongly to navigate current challenges [8][29] Other Important Information - SG&A expenses decreased by $1.3 million in Q4 2024 compared to the previous year, with a total annual decrease of $2.5 million [19][40] - Operating cash flow for 2024 was $27.1 million, contributing to an increase in cash balance of over $12 million during the year [21][41] Q&A Session Summary Question: No questions were raised during the session - The operator noted that there were no questions at this time, and the call was turned back to Mark Davis for closing remarks [44]

New funding expands foundation's roster of funded partners to 52 organizations offering scalable training programs in dozens of states MOORESVILLE, N.C., Feb. 27, 2025 /PRNewswire/ -- The Lowe's Foundation today announced nearly $9 million in Gable Grants to strengthen 15 nonprofits on the front lines of a growing skilled trades workforce movement. From Alaska to Mississippi, each organization is helping prepare new tradespeople as rising wages fuel more career opportunities. Over the past 12 months in cons ...

Retail Sector Performance - The recent earnings focus has been on the Retail sector, with big-box operators like Walmart and Home Depot reporting quarterly results [2] - Walmart's shares declined post-earnings due to disappointing guidance, despite solid results and continued market share gains [3] - Home Depot's shares increased after reporting better-than-expected comparable sales, marking a positive turnaround after eight consecutive quarters of declines [4] Earnings Trends - Over 90% of S&P 500 companies have reported earnings, showing a notable growth trend with total earnings up +13.6% year-over-year and revenues up +5.5% [7] - In the Retail sector, earnings for companies reporting are up +32.3% year-over-year, with 72% beating EPS and revenue estimates [7] - Excluding Amazon, the Retail sector's earnings growth adjusts to +4.6% and revenue growth to +5.4% [7] Tech Sector Outlook - The Tech sector is expected to see earnings growth of +24.6% in Q4, continuing a trend of double-digit growth for six consecutive quarters [9][10] - Despite a strong outlook, recent data indicates a shift in earnings estimate revisions for the Tech sector [11] Future Earnings Expectations - Total S&P 500 earnings for Q1 2025 are expected to increase by +6.5% year-over-year, although estimates have been declining since the quarter began [14] - A broad-based revision trend shows cuts in estimates across 15 of 16 sectors, with the Tech sector also experiencing downward pressure [17] - The expectation for 2025 is nearly all sectors to enjoy earnings growth, with seven sectors projected to achieve double-digit growth [19]