economy
Home Depot was a mistake but selling it now would compound it. Why we're hanging on
Home Depot worked its way modestly higher after a down open on a quarterly update that was just OK and a status quo outlook.
TL;DR
- Home Depot's Q1 revenue increased by 4.8% year-over-year to $41.77 billion, surpassing LSEG estimates.
- Earnings per share (EPS) fell 3.7% to $3.43, narrowly beating the analyst estimate of $3.41.
- Same-store sales missed expectations, increasing by 0.6% overall, with U.S. sales up 0.4%.
- Analysts reduced the price target to $360 from $420 due to rising interest rates negatively impacting housing-related stocks.
- The company reaffirmed its 2026 forecast, projecting sales growth of 2.5% to 4.5% and flat same-store sales growth to up 2%.
- Management cited increased fuel costs as an input cost challenge, with potential offsets from tariff refunds.
- Home Depot completed the acquisition of Mingledorff's, a wholesale distributor of HVAC equipment, to bolster its Pro segment.
- Investments in the Pro segment are resonating, with Pro sales outperforming DIY sales.