Home Depot Shares Skid As Investors Take Fright At Weak 2019 Outlook


Home Depot Inc (NYSE: HD)

Shares of Home Depot tumbled Tuesday, after the home improvement retailer missed Wall Street estimates on revenue, profit and sales at U.S. outlets open for at least 52 weeks. Rising home prices that have weakened construction activity and housing demand may have impacted the results.

The company also announced a buyback program and dividend hike, but issued a weak fiscal 2019 guidance. HD stock fell 3.28% to $183.75 in pre-market trade immediately following the earnings report. On Monday, the stock fell 1.25% to 189.98 per share, just above at its 200-day line.

HD Earnings & Outlook

Home Depot said it had net income of $2.34 billion, or $2.09 per share for the three months to February 3, 2019. In the same period a year ago, the company posted net income of $1.78 billion, or $1.52 per share. On average, analysts polled by Refinitiv were expecting the company to report adjusted earnings of $2.16 per share for its fiscal 2018 fourth quarter.

Revenue came to $26.5 billion, up 10.9% from $23.88 billion in fiscal 2017 fourth quarter. Analysts had called for revenue of $26.57 billion, based on data provided by Refinitiv. For the full year, revenue was up 7.2% while comparable store sales rose 5.2%.

Comparable store sales rose 3.2% during Q4 2018, missing Wall Street expectations for 4.6% growth. Customer transactions jumped 7.7%, while sales per square foot climbed 4.9% and the average shopper’s ticket was up 2.5%.

For fiscal 2019, Home Depot views earnings of $10.03 per share, compared with Refinitiv consensus of $10.26 per share. The Atlanta-based company forecasts full-year revenue growth of 3.3% and a 5% jump in comparable store sales.

Home Depot CEO Comments

“We achieved record sales and net earnings in fiscal 2018, while making great progress on the strategic investments we laid out in December of 2017. We focused on enhancing the interconnected retail experience for our customers, providing localized and innovative product, and delivering best in class productivity,” said Craig Menear, chairman, CEO and president.

“Our view on the health of the economy and the consumer, as well as the momentum of our strategic investments, supports our belief that we can deliver comparable sales growth of 5.0 percent in fiscal 2019. I would like to thank our associates for their solid execution and exceptional work in service to our customers.”

Home Depot, Inc. Profile

Home Depot, Inc. is a home improvement retailer, which engages in the sale of building materials and home improvement products. Its products include building materials, home improvement products, lawn and garden products, and decor products.

It offers home improvement installation services and tool and equipment rental. The company was founded by Bernard Marcus, Arthur M. Blank, Kenneth Gerald Langone and Pat Farrah on June 29, 1978 and is headquartered at Atlanta, GA. – CNN Money