Home Depot Expects Modest Sales Growth in 2025

Image: Home Depot’s shares have been choppy the past few years.

By Brian Nelson, CFA

Home Depot (HD) recently reported mixed first quarter results with revenue coming in higher than expectations, but non-GAAP earnings per share coming up a bit light relative to consensus. Sales during the first quarter advanced 9.4%, but comparable store sales fell 0.3%, despite increasing 0.2% in the U.S. Net earnings fell to $3.43 billion from $3.6 billion in the year-ago period. Adjusted diluted earnings per share for the first quarter was $3.56 compared with $3.67 in last year’s quarter.

Management had the following to say about the quarter:

Our first quarter results were in line with our expectations as we saw continued customer engagement across smaller projects and in our spring events. We feel great about our store readiness and product assortment as spring continues to break across the country, and I (CEO Ted Decker) would like to thank our associates for their continued hard work and dedication.

Looking to fiscal 2025, Home Depot expects total sales growth of approximately 2.8%, with comparable store sales growth of roughly 1% compared to the same 52-week period last year. Gross margin is targeted at 33.4%, while its adjusted operating margin is expected to be 13.4% for the year. Diluted earnings per share is expected to decline approximately 3%, while adjusted diluted earnings per share is targeted to fall approximately 2%. Capital expenditures are budgeted at 2.5% of total sales. Shares yield 2.5% at the time of this writing.

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