Home Depot Q4 Beats Market; Sees Weak Earnings, Higher Sales In FY25; Stock Drops

Home Depot

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(RTTNews) - Home Depot Inc., while reporting higher fourth-quarter results above market estimates, on Tuesday issued fiscal 2025 guidance, expecting weak earnings, but higher sales and comparable sales. Further, the home improvement retailer announced higher quarterly dividend.

In pre-market activity on the NYSE, Home Depot shares were losing around 2.4 percent to trade at $373.33.

Ted Decker, chair, president and CEO, said, "Our fourth quarter results exceeded our expectations as we saw greater engagement in home improvement spend, despite ongoing pressure on large remodeling projects. Throughout the year, we remained steadfast in our investments across our strategic initiatives to position ourselves for continued success, despite uncertain macroeconomic conditions and a higher interest rate environment that impacted home improvement demand."

Further, Home Depot announced that its board of directors approved a 2.2 percent increase in its quarterly dividend to $2.30 per share, which equates to an annual dividend of $9.20 per share. The dividend is payable on March 27, to shareholders of record on the close of business on March 13.

For fiscal 2025, the company projects earnings per share to decline around 3 percent from $14.91 in fiscal 2024, and adjusted earnings per share to drop around 2 percent from $15.24 last year. Operating margin would be around 13 percent, and adjusted operating margin would be around 13.4 percent.

Further, the company expects total sales growth of approximately 2.8 percent from last year's $159.5 billion, and comparable sales growth of approximately 1.0 percent, compared to a drop of 1.8 percent a year earlier.

The Wall Street analysts on average expect the company to earn $15.76 per share on sales of $164.35 billion. Analysts' estimates typically exclude special items.

In its fourth quarter, the company's net earnings totaled $3 billion or $3.02 per share, higher than last year's $2.80 billion or $2.82 per share.

Adjusted earnings per share were $3.13, compared with $2.86 in the same period of fiscal 2023. Analysts had expected the company to earn $3.04 per share.

Sales for the fourth quarter were $39.70 billion, an increase of 14.1 percent from $34.79 billion last year. The Street was looking for sales of $39.07 billion for the quarter.

The fourth quarter of fiscal 2024 consisted of 14 weeks compared with 13 weeks for the prior year. The 14th week added around $0.30 to adjusted earnings per share and approximately $2.5 billion in sales for the quarter.

Comparable sales increased 0.8 percent, and comparable sales in the U.S. increased 1.3 percent.

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