Home Depot (HD) Q4 2024 earnings

Home Depot will report its fiscal fourth-quarter earnings on Tuesday, as higher interest rates and home prices challenge the housing market and dampen demand for do-it-yourself projects.

The company is expected to release results around 6 a.m. ET and hold an earnings call at 9 a.m. ET.

Here’s what Wall Street expects for the home improvement retailer, according to a survey of analysts by LSEG:

• Earnings per share: $3.01 expected
• Revenue: $39.16 billion expected

Home Depot has faced a more difficult backdrop for selling supplies for home improvement projects. Sales growth slowed in 2023, after consumers’ huge appetite for home renovations during the Covid-19 pandemic returned to more typical patterns. Inflation and a shift back to spending on services such as vacations and restaurants also dinged consumer demand for larger projects and pricier items.

Since roughly the middle of 2023, Home Depot’s leaders have pinned the company’s problems on a tougher housing market. Chief Financial Officer Richard McPhail told CNBC in August that consumers have had a “deferral mindset” and have held out for interest rates to drop before moving or borrowing money for bigger projects on their homes, such as a bathroom or kitchen renovation.

While in that waiting game, Home Depot and its rival Lowe’s have made the case to investors that longer-lasting factors including the aging U.S. home stock, home equity gains in the real estate market and Americans’ shift to hybrid work schedules will boost spending on homes.

Home Depot has looked to home professionals as one of its major sales drivers. It bought SRS Distribution, a Texas-based company that sells supplies to professionals in the roofing, pool and landscaping businesses, for $18.25 billion last year. It marked the largest acquisition in the company’s history.

Home Depot raised its full-year outlook in November to reflect better-than-expected third-quarter results and some increased hurricane-related demand. The company said it expected total sales to rise about 4%, citing the effect of having a 53rd week in the year and an approximately $6.4 billion contribution from acquiring SRS.

However, Home Depot said it expected comparable sales, a metric that includes the company’s website and stores open for more than a year, to decline about 2.5% for the year.

When it comes to the housing market, there have been few signs of relief. Mortgage rates have remained high despite interest rate cuts by the Federal Reserve. The median price of a home sold in January was $396,900, up 4.8% from the year before and the highest price ever for the month of January, according to the National Association of Realtors.

Shares of Home Depot closed Monday at $382.42. As of Monday’s close, the company’s shares have fallen about 2% so far this year. That trails behind the S&P 500’s approximately 2% gains during the same period.

This is a developing story. Please check back for updates.