Home Depot Revenue Rises Unexpectedly Despite Inflation Headwind

Home Depot (HD) reported a surprising first-quarter earnings growth on Tuesday and extended full-year revenue guidance even as giant spending on home improvement and store visits began to feel the effects of inflation. Loyer (LOW) follows Wednesday. Home Depot stocks and low prices have risen before opening.


Following a strong 2020 and 2021, this year has seen strong starts for Home Depot and Lowe. According to Placer.ai data, their January and February store visits continued above pre-epidemic levels.

But April Visit is down 1.6% for Home Depot and 9.5% for Lowe’s vs. April 2019. Visits increased in both March and April, data firm Placer.ai says.

Spring is usually the strongest season for home improvement retailers, the firm adds.

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Home Depot Income

Guess: Analysts surveyed by Factset expect 5% EPS decline for April quarter $ 3.69 to 2% revenue decline to $ 36.705 billion. Same-store sales fell 3% after an 8% gain in the previous holiday quarter.

The result: Home Depot earnings rise slightly to $ 4.09 per share Revenue rose 3.8% to $ 38.91 billion. Same-store sales rose 2.2%, US comps rose 1.7%.

Outlook: Home Depot Financial 2023 EPSK Mid-Single-Digit Total Sales and Comps Increased by About 3%. Wall Street saw Home Depot revenue rise 3.6% and revenue 1.8%. In February, Home Depot reported 2023 EPS growth in lower single digits and sales growth as “slightly positive.”

Home Depot Stock

Home Depot shares rose nearly 3% before opening in the stock market today. It will still be well below a falling 50-day moving average and better than the 200-day average.

The relative strength line of Home Depot stock is improving after a slide from December 2021.

Low’s earnings

Guess: Wall Street predicts Lowe’s earnings per share will rise one paise to $ 3.22, although revenue will fall 3% to $ 23.765 billion. Same-store sales fell 2.5% after a 5% gain in the previous holiday quarter.

The result: Check again early Wednesday.

Outlook: Analysts see 2023 earnings per share of $ 13.39 and revenue of $ 98.106 billion. It comes after Lowe’s indicated height in February.

Lowe’s stock

Shares of Lowe rose 2% early Tuesday. Low stocks are also below key support levels. Floor and decor (FND), which moderately lost its May 6 earnings and sales philosophy, fell 2.3% on Monday and was not yet active on Tuesday.

The woes of inflation follow the epidemic boom

For Home Depot and Lowe, the epidemic of home renovation and spending has slowed, while rising interest rates are weighing heavily on the housing sector.

Companies also face a shortage of equipment and drivers which increase the cost of driving.

In 2020 and 2021, consumers who are stuck at home or moving out have spent heavily on renovation projects.

Find Aparna Narayanan on Twitter @IBD_Aparna.

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