Zinger Key Points
- Home Depot reported Q4 sales of $39.70 billion, surpassing expectations, while comparable U.S. sales grew by 1.3%.
- The company expects 2025 adjusted EPS to decline 2%, missing consensus estimates, causing pre-market shares to drop.
- Get access to your new suite of high-powered trading tools, including real-time stock ratings, insider trades, and government trading signals.
On Tuesday, Home Depot Inc HD stock is trading higher in a volatile session after the home improvement retailer reported its fourth-quarter 2024 results and provided its 2025 outlook.
HD reported fourth-quarter sales growth of 14.1% year-over-year to $39.70 billion, beating the consensus estimate of $39.14 billion. Adjusted EPS was $3.13 (+9.4% year over year), beating the consensus of $3.00.
Customer transactions for the quarter rose 7.6%. Comparable sales increased 0.8%, and comparable sales in the U.S. rose 1.3%.
Margins: Gross profit rose 13.3% YoY to $13.03 billion, with a margin of 32.8%, down 25 bps YoY. The operating margin was 11.3%, down 60 bps YoY, and operating income for the quarter rose 8.5% to $4.495 billion. The adjusted operating margin slipped to 11.7% from 12.1% YoY.
Operating expenses increased 15.9% year over year to $8.539 billion.
The average ticket in the fourth quarter was $89.11, a 0.3% increase, and sales per retail square foot increased 1.2% to $556.90.
As of February 2, the company held $1.659 billion in cash and equivalents. It generated an operating cash flow of $19.810 billion for fiscal 2024, compared to $21.172 billion a year ago.
At the end of the quarter, HD operated 2,347 retail stores and over 780 branches across the U.S., Canada, and Mexico.
Dividend: Home Depot announced a 2.2% increase in its quarterly dividend to $2.30 per share, totaling an annual dividend of $9.20 per share. The dividend is payable on March 27, 2025, to shareholders of record as of March 13, 2025.
2025 Outlook: Home Depot forecasts total sales growth of 2% year-over-year, reaching $163.98 billion, slightly below the consensus of $164.17 billion.
Comparable sales are expected to rise approximately 1%, with an adjusted operating margin of around 13.4%.
The company projects adjusted EPS to decline by about 2%, from $15.24 to $14.94, falling short of the $15.57 consensus estimate.
Price Action: HD shares are trading higher by 1.15% at $386.80 premarket on the last check Tuesday.
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