July 7, 2022

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Home Depot (HD) Q1 2022 earnings

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Home Depot on Tuesday raised its full-year outlook and reported strong quarterly earnings, fueled by the company’s strongest first-quarter sales on record, an early signal that the retailer is so far weathering inflation.

Home Depot executives said they haven’t seen shoppers trading down in the face of higher prices, and don’t expect them to start.

For the fiscal year, the retailer is now expecting sales growth of about 3% and earnings per share growth in the mid-single digits. The company previously forecast “slightly positive” sales growth and earnings per share growth in the low-single digits. Wall Street was expecting revenue growth of 1.8% and earnings per share growth of 3.6% for fiscal 2022.

Here’s what Home Depot reported for the quarter ended May 1 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $4.09 vs. $3.68 expected
  • Revenue: $38.91 billion vs. $36.72 billion expected

The home improvement retailer reported fiscal first-quarter net income of $4.23 billion, or $4.09 per share, up from $4.15 billion, or $3.86 per share, a year earlier. Analysts surveyed by Refinitiv were expecting the company to earn $3.68 per share.

Net sales rose 3.8% to $38.91 billion, topping expectations of $36.72 billion. Same-store sales increased 2.2% in the quarter.

U.S. same-store sales rose 1.7%, despite domestic same-store sales declines in March and April as the company faced tougher comparisons against last year’s stimulus-check sales boost and an earlier spring. A year ago, the company reported U.S. same-store sales growth of 29.9%.

“The strong performance in the quarter is even more impressive given the robust performance we were comparing against last year,” CEO Ted Decker said on the company’s conference call with analysts.

Weathering inflation

Decker said that the company hasn’t seen the sensitivity to inflation that was initially expected.

Customer transactions fell 8.2% but were offset by higher sales amid…

2022-05-17 10:24:52

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