Home Depot Inc
Q3 2024 Earnings
Excludes $138 million ($0.14 per share) of acquired intangible asset amortization, including $86 million related to SRS acquired on June 18, 2024, with a $0.03 per share tax benefit on the adjustment
Market Reaction
S&P 500 over the same 30 days: +1.22%.
Did HD Beat Earnings? Q3 2024 Results
Home Depot delivered a stronger-than-expected third quarter, with adjusted diluted EPS of $3.78 beating the $3.64 consensus by 3.85% and revenue of $40.22 billion topping estimates by 2.28%, rising 6.7% year over year. The headline driver was the June 2024 acquisition of SRS Distribution, which contributed meaningfully to the top-line jump and is expected to add approximately $6.40 billion in incremental sales for the full fiscal year, underscoring why the retailer made its $18.25 billion bet on deepening its professional contractor business as DIY demand softens under elevated interest rates. Normalizing weather and hurricane-related demand provided an additional lift, though comparable sales still declined 1.3%, reflecting persistent macro headwinds in the home improvement sector. Operating margin compressed to 13.5% on a GAAP basis, weighed down by SRS-related amortization and a 28.3% surge in interest expense. Looking ahead, Home Depot projects total sales growth of approximately 4% for fiscal 2024 and expects adjusted diluted EPS to decline approximately 1% from the prior year's $15.25, as integration costs and financing burdens temper the SRS-driven growth.
- Weather normalization drove better engagement across seasonal goods and certain outdoor projects
- Incremental sales related to hurricane demand
- SRS acquisition contributed to 6.6% total sales growth
- Comparable sales declined 1.3% overall and 1.2% in the U.S.
- Average ticket declined 0.8% to $88.65
- Customer transactions essentially flat at 399.0 million
“While macroeconomic uncertainty remains, our third quarter performance exceeded our expectations. As weather normalized, we saw better engagement across seasonal goods and certain outdoor projects as well as incremental sales related to hurricane demand. I would like to thank all of our associates for their dedication in serving our customers and communities.”
Home Depot CEO, on the earnings call
Forward Guidance & Outlook
Home Depot updated its fiscal 2024 guidance (53-week year): total sales to increase approximately 4% including SRS and the 53rd week; 53rd week projected to add approximately $2.3 billion to total sales; SRS expected to contribute approximately $6.4 billion in incremental sales; comparable sales to decline approximately 2.5% for the 52-week period; approximately 12 new stores; gross margin of approximately 33.5%; operating margin of approximately 13.5% (adjusted approximately 13.8%); tax rate of approximately 24%; net interest expense of approximately $2.1 billion; 53-week diluted EPS to decline approximately 2% from $15.11 in fiscal 2023, with the 53rd week contributing approximately $0.30; 53-week adjusted diluted EPS to decline approximately 1% from $15.25 in fiscal 2023.
HD YoY Financials
Figures from SEC filings and company reports. Not investment advice.