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Home Depot (HD) Beats on Q3 Earnings and Sales Estimates (Revised)
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Home Depot (HD - Free Report) reported solid third-quarter fiscal 2023 results, wherein both the top and bottom lines exceeded the Zacks Consensus Estimate but declined year over year. Results gained from strength in categories associated with smaller projects. Meanwhile, continued pressure in certain big-ticket, discretionary categories acted as a deterrent.
Home Depot's earnings of $3.81 per share declined 10% from $4.24 registered in the year-ago quarter. However, the bottom line beat the Zacks Consensus Estimate of $3.76.
Net sales fell 3% to $37,710 million from $38,872 million in the year-ago quarter. However, the metric beat the Zacks Consensus Estimate of $37,523 million.
The Home Depot, Inc. Price, Consensus and EPS Surprise
Home Depot's comparable sales fell 3.1% in the reported quarter. The company’s comparable sales in the United States declined 3.5%. Comps were impacted by a decrease in customer transactions and average tickets. Customer transactions declined 2.4% year over year, while the average ticket rose 0.3%. Sales per retail square foot were down 3.7%.
In dollar terms, the gross profit decreased 3.7% to $12,738 million from $13,224 million in the year-ago quarter. The operating income fell 12.1% year over year to $5,406 million.
SG&A expenses of $6,649 million grew 2.8% from the $6,468 million reported in the year-ago quarter.
Image Source: Zacks Investment Research
This Zacks Rank #4 (Sell) company’s shares have dropped 8.3% in the past three months compared with the industry's decline of 7.2%.
Other Updates
Home Depot ended the third quarter of fiscal 2023 with cash and cash equivalents of $2,058 million, long-term debt (excluding current installments) of $40,567 million and shareholders' equity of $1,430 million. In the nine months ended Oct 29, 2023, the company generated $16,439 million of net cash from operations.
Fiscal 2023 View
Management narrowed its view for fiscal 2023. Home Depot now anticipates sales and comparable sales to decline in the range of 3-4% compared with the earlier guidance of a 2-5% year-over-year decline.
The company expects an effective tax rate of 24.5% in fiscal 2023. Interest expenses are likely to be $1.8 billion in fiscal 2023. HD estimates earnings per share to decline 9-11% compared with the previously communicated view of a 7-13% decrease year over year in fiscal 2023.
The Zacks Consensus Estimate for American Eagle Outfitters’ current fiscal-year earnings and sales indicates growth of 36.1% and 2.4%, respectively, from the previous year’s reported figures. AEO has a trailing four-quarter average earnings surprise of 43.2%.
Ross Stores, which operates off-price retail apparel and home fashion stores, currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Ross Stores’ current financial-year sales and earnings indicates growth of 7.1% and 19.4%, respectively, from the year-ago reported numbers. ROST has a trailing four-quarter earnings surprise of 11.4%, on average.
Walmart, which operates a chain of hypermarkets, discount department stores and grocery stores, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 5.5%.
The Zacks Consensus Estimate for Walmart’s current financial-year sales implies an improvement of 4.2% from the year-ago period’s actual. WMT has a trailing four-quarter earnings surprise of 12%, on average.
(We are reissuing this article to correct a mistake. The original article, issued on November 14, 2023, should no longer be relied upon.)
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Home Depot (HD) Beats on Q3 Earnings and Sales Estimates (Revised)
Home Depot (HD - Free Report) reported solid third-quarter fiscal 2023 results, wherein both the top and bottom lines exceeded the Zacks Consensus Estimate but declined year over year. Results gained from strength in categories associated with smaller projects. Meanwhile, continued pressure in certain big-ticket, discretionary categories acted as a deterrent.
Home Depot's earnings of $3.81 per share declined 10% from $4.24 registered in the year-ago quarter. However, the bottom line beat the Zacks Consensus Estimate of $3.76.
Net sales fell 3% to $37,710 million from $38,872 million in the year-ago quarter. However, the metric beat the Zacks Consensus Estimate of $37,523 million.
The Home Depot, Inc. Price, Consensus and EPS Surprise
The Home Depot, Inc. price-consensus-eps-surprise-chart | The Home Depot, Inc. Quote
Home Depot's comparable sales fell 3.1% in the reported quarter. The company’s comparable sales in the United States declined 3.5%. Comps were impacted by a decrease in customer transactions and average tickets. Customer transactions declined 2.4% year over year, while the average ticket rose 0.3%. Sales per retail square foot were down 3.7%.
In dollar terms, the gross profit decreased 3.7% to $12,738 million from $13,224 million in the year-ago quarter. The operating income fell 12.1% year over year to $5,406 million.
SG&A expenses of $6,649 million grew 2.8% from the $6,468 million reported in the year-ago quarter.
Image Source: Zacks Investment Research
This Zacks Rank #4 (Sell) company’s shares have dropped 8.3% in the past three months compared with the industry's decline of 7.2%.
Other Updates
Home Depot ended the third quarter of fiscal 2023 with cash and cash equivalents of $2,058 million, long-term debt (excluding current installments) of $40,567 million and shareholders' equity of $1,430 million. In the nine months ended Oct 29, 2023, the company generated $16,439 million of net cash from operations.
Fiscal 2023 View
Management narrowed its view for fiscal 2023. Home Depot now anticipates sales and comparable sales to decline in the range of 3-4% compared with the earlier guidance of a 2-5% year-over-year decline.
The company expects an effective tax rate of 24.5% in fiscal 2023. Interest expenses are likely to be $1.8 billion in fiscal 2023. HD estimates earnings per share to decline 9-11% compared with the previously communicated view of a 7-13% decrease year over year in fiscal 2023.
Key Picks
Some better-ranked stocks are American Eagle Outfitters (AEO - Free Report) , Ross Stores (ROST - Free Report) and Walmart (WMT - Free Report) .
American Eagle Outfitters is a specialty retailer of casual apparel, accessories and footwear. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for American Eagle Outfitters’ current fiscal-year earnings and sales indicates growth of 36.1% and 2.4%, respectively, from the previous year’s reported figures. AEO has a trailing four-quarter average earnings surprise of 43.2%.
Ross Stores, which operates off-price retail apparel and home fashion stores, currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Ross Stores’ current financial-year sales and earnings indicates growth of 7.1% and 19.4%, respectively, from the year-ago reported numbers. ROST has a trailing four-quarter earnings surprise of 11.4%, on average.
Walmart, which operates a chain of hypermarkets, discount department stores and grocery stores, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 5.5%.
The Zacks Consensus Estimate for Walmart’s current financial-year sales implies an improvement of 4.2% from the year-ago period’s actual. WMT has a trailing four-quarter earnings surprise of 12%, on average.
(We are reissuing this article to correct a mistake. The original article, issued on November 14, 2023, should no longer be relied upon.)