The Home Depot (NYSE: $HD) is a multinational home improvement retail giant that sells tools, appliances, construction products, and services that include fuel, and transport rentals. On Tuesday, February 25, 2025 it released its Q4 fiscal 2024 results to a positive market reaction. Below is a breakdown of the results.
Home Depot Q4 Results
In the fourth quarter of fiscal 2024, Home Depot reported revenue of $39.7 billion, a 14.1% YoY improvement, and above estimates of $39.16 billion. Adjusted earnings per share increased to $3.13 from $2.86 in the past year, beating estimates of $3.04.
Other Q4 Highlights
Comparable sales rose 0.8% YoY, while US comparable sales were up 1.3% YoY. The results ended eight consecutive quarters of dips in comparable sales, and beat estimates of a 1.7% decline. Home Depot attributed around 0.6% of the comparable sales to the regions hit by hurricanes Milton, and Helena.
According to Home Depot, customer visits to its stores and website were up in the quarter compared to the same period last year. Transactions increased to 400.4 million, a nearly 8% YoY increase, while the average ticket sales increased to $89.11, slightly higher than the $88.87 the previous year.
Full-Year Highlights
For the full year, sales came in at $159.5 billion, a $6.8 billion increase, or 4.5% YoY. Comparable sales for the full year declined 1.8%, while US comparable sales declined 1.8%. The company reported net earnings of $14.8 billion or an adjusted EPS of $15.24, compared to an adjusted EPS of $15.25 in fiscal 2023.
Home Depot Headwinds
Home Depot has faced headwinds since the second half of 2023 as sales growth slowed down. This was due to a slowdown in home improvements after the pandemic. Additionally, increased spending on vacations, and inflation also slowed down home improvement projects spending.
The challenges in the housing market have also affected spending on home improvement. Mortgage rates remain high despite rate cuts by the Federal Reserve, and the median price of homes sold in January was up 4.8% YoY. The median price of $396,900 is the highest on record for January, according to data from the National Association of Realtors.
Dividend Payouts
The company announced it had increased its quarterly dividend by 2.2% to $2.30 per share, for an annual dividend of $9.20, which marks the 152nd consecutive increase in quarterly cash dividends.
Home Depot Forecast
For fiscal 2025, Home Depot expects total sales to grow by approximately 2.8%, while comparable sales are expected to grow by around 1%, below estimates of 1.65%. The company projects it will open around 13 new stores and end the year with a gross margin of around 33.4%. Home Depot expects an adjusted operating margin of around 13.4%, while adjusted EPS is expected to decline around 2% from the $15.24 reported in fiscal 2024. Meanwhile, capital expenditures are expected to be around 2.5% of total sales.
Home Depot (HD) Market Performance
Home Depot shares rose 0.15% to $383 per share in pre-market trading at 8:57 AM EST. As of Monday’s closing, HD shares are up 2.81%, while over the past six months, the stock is up 1.82%. The stock has underperformed the market, with the S&P 500, which is up 6.2% in the past six months, and 17.58% in the past year.
Should You Add Home Depot To Your Portfolio?
While Home Depot missed fiscal 2025 forecasts, it increased its dividend for the 152nd consecutive quarter. The company also has proven staying power, and despite recent challenges, it still generates positive revenue. Finally, home improvements are expected to recover in the latter half of 2025 as interest rates continue to decline. Consequently, HD is potentially a great investment in the long term.
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