Home Depot And Lowe's Q2 Earnings Preview: Foot Traffic Data Shows Resilience

Home improvement goliaths Home Depot Inc HD and Lowe’s Companies Inc LOW are set to issue second quarter earnings, with Home Depot reporting on Tuesday before the bell, followed by Lowe's which will report next Tuesday.

Here's what investors need to know about the print, and what insights Placer.ai gathered on the home improvement bellwethers.

Expected Earnings: Analysts anticipate that Home Depot will issue earnings of $4.44 per share on revenues of $42.25 billion before the market opens on Tuesday, according to Benzinga Pro. Lowe's is expected to post earnings of $4.49 per share on revenues of $25.01 billion when it reports on Aug. 22.

Visitation Metrics Highlight Resilience: Despite a quieter housing market due to the Federal Reserve's battle against inflation, foot traffic data suggests both Home Depot and Lowe’s maintain their popularity.

The warm weather's effect on home improvement, and new home sales which require furnishings seem to be the drivers for the resilience seen in the first half of the year, according to Placer.ai's data.

Demographic Divergence: Home Depot pulled in traffic from larger and wealthier households in the first half of the year, Placer.ai noted, with a median household income (HHI) of $74,400 and an average household size of 2.67.

On the other side, Lowe’s, with a median HHI of $69,100 and an average household size of 2.58, seems to be strategically focusing on rural consumers and smaller projects, Placer.ai said.

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Both Home Depot and Lowe’s are ramping up strategies to cater to professional contractors, the data shows, as foot traffic from professional sectors is significantly higher than national averages.

Last quarter, Home Depot revised its 2023 guidance based on “continued uncertainty regarding consumer demand.” The home improvement retailer said then that it expects revenue to decrease 2% compared to fiscal 2022, and diluted earnings per share to drop between 7% and 13%.

In Lowe’s Q1 report, the company said it expects $87 billion to $89 billion in full year 2023 sales, down from the previous $88 billion to $90 billion, against earnings of $13.20 and $13.60, down from the previous $13.60 to $14.

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