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Residence Depot (NYSE:HD) is the top-trending inventory on social media as we speak, and the shares are down about 4% this morning after the home-improvement retailer reported its fourth-quarter outcomes. The corporate’s income got here in beneath analysts’ common estimate, and it expects its gross sales to be little modified this yr in comparison with 2022. On a optimistic notice, the retail chain’s This fall U.S. comparable gross sales and its backside line did are available in barely above the imply estimate.
The downturn of the U.S. housing market, nonetheless, seems to be having a significant, damaging impression on Residence Depot’s enterprise. However, the retailer intends to extend the compensation of its in-store workers by a complete of $1 billion beginning this yr, and it raised its dividend by 10% to $2.09 per share.
Residence Depot’s Outcomes
Residence Depot’s prime line elevated by 0.3% year-over-year to $35.8 billion, coming in $170 million beneath analysts’ common estimate. However the 0.3% YOY lower within the firm’s U.S. comparable gross sales was higher than analysts, on common, had anticipated. And its This fall earnings per share of $3.30 was barely increased than the imply estimate of $3.29.
The corporate, nonetheless, expects its EPS to drop about 5% this yr.
HD Inventory and the Influence of the Housing Downturn
Forward of HD’s outcomes, Credit score Suisse warned that housing “softness… ought to ultimately weigh on the broader residence enchancment demand.” The agency provides HD a “impartial” ranking.
The lowered time spent on residence enchancment by shoppers following a surge in such exercise through the pandemic can also be doubtless having a damaging impression on HD’s monetary outcomes. As a substitute, shoppers are spending extra money and time on leisure pursuits that they may not undertake through the pandemic.
On the date of publication, Larry Ramer didn’t maintain (both straight or not directly) any positions within the securities talked about on this article. The opinions expressed on this article are these of the author, topic to the InvestorPlace.com Publishing Tips.
