Home Depot on Tuesday reported fourth quarter results that exceeded expectations, but high interest rates continue to cloud the outlook for the year. Net sales for the three months ended February 2nd rose 14.1% to $39.7 billion, an estimate of $39.16 billion, according to LSEG. Earnings per share (EPS) rose 6.7% annually to $3.02. The store’s sales rose 0.8% in the quarter, ending its eight straight quarterly wins. On average, analysts expected a decline of 1.5% to 2%, depending on the financial data provider. Bottomline Home Depot provided a solid report for the November-January period — suspended by positive store sales growth — and the Federal Reserve easing campaign launched in September Since then, we have provided wise 2025 guidance considering the lack of cooperation in the interest rate environment. The Fed’s fee reduction cycle was expected to lead to a decline in mortgage rates and help revive activity in the stagnant housing market. The paper has not yet been unfolded as U.S. government bond yields (which affect mortgage rates) marched higher against Fed grain. Therefore, the US 30-year fixed-rate mortgage has gone from about 6.15% on the Fed’s top day to over 7% for the majority of fall. The interest rate painting also hurts the types of large housing improvement projects that rely on fundraising, such as kitchen and bathroom remodeling. That dynamic will remain on display in the fourth quarter of Home Depot, executives said in a revenue call Tuesday. Why Home Depot owns it: Adding Home Depot to portfolio ahead of the initial Federal Reserve interest rate cuts in September and lowering borrowing costs is on the horizon, and rebound activity in the housing market I bet that it would cause. Mortgage rates remain stubbornly high, but US restructuring efforts related to extreme weather should help businesses support home rebounds. Competitors: Lowe’s portfolio weighting: 3.18% Latest purchases: Starting February 4, 2025: September 9, 2024 Against its stubborn background, Home Depot executives have improved rates and housing turnover rates Without it, it was envisaging improvements in rates and housing turnover with continued pressure on big. Project modification. These assumptions help explain why Home Depot’s 2025 outlook for the same store sales in 2025 wants a 1% growth, which is lighter than the 1.7% consensus, according to Factset. Can it prove to be conservative? It’s hard to say for sure, but that’s certainly probably the case. After briefly surpassing 4.8% in mid-January, the 10-year Treasury yield fell below 4.3% on Tuesday, with mortgage rates eased at about 6.9%. If the mortgage rate falls below 6.5%, the housing market could be coiled spring. HD 1y Mountain Home Depot’s stock performance over the past 12 months. Over 3% shares will reach around $395 per share on Tuesday as stocks appear to lose six-day skids. It fell 7.3% during that stretch, falling into negative territory from the start of the year after a few solid weeks of weeks starting in 2025. Until Monday, Home Depot is 11.4% below its highest deadline high of $431.37 set in December. 6. The recent weakness in stocks likely lowered the bar for Home Depot’s guidance, laying the foundation for a rally seen on stocks on Tuesday. We repeat our rating and price targets worth $440 per share. Quarterly commentary investors value Home Depot’s management team and have the potential to run the company, so there’s a few things out of control. Home Depot cannot force the Fed to lower interest rates so that fellow clubs holding Coterra Energy cannot set oil prices. However, some of the softer economic data these days, including a weak consumer confidence survey released on Tuesday morning, has turned the Fed’s calculations into interest rate cuts, more than the market had expected a few weeks ago. It may lead to. Home Equity’s credit line, known as HELOC loans, is sensitive to the Fed’s benchmark interest rates and is a major source of funding for remodeling. “It’s 4.3% in 10 years. You can’t stay negative,” Jim Cramer said. “The Fed will have to cut, why? Because there was a peak in employment,” he said inflationary pressures are concentrated in areas like insurance and eggs. Jim added, “HELOC is what drives Home Depot, not just mortgage fees.” Certainly, Decker said in Tuesday’s revenue that consumers tapping home values for a full project should see what’s going forward. In addition to HELOCS, cash-out refinance mortgages are another way to do so. Here’s what Decker had to say: Projects usually receive their funding through Herk through their respective cash outs (refinances). In our home. And we recognize that homes continue to embrace age and that people stay in those homes and are very unlikely to see the low interest rates they have seen over the past two or three years. A bigger remodeling project. In general, Home Depot is directing its investment pace as a percentage of overall sales to its business, betting that short-term margin pressure is worth its long-term growth. Serving professional customers is one of the most important parts of Home Depot’s overall growth strategy, exhibited in the $18.25 billion acquisition of SRS distributions completed in June. Ta. According to Billy Basteck, executive vice president of merchandise, professional sales are stronger than customers in the period, and have the strength of professional-focused categories such as plaster, decks, concrete and sensing. It’s there. Regarding SRS, specifically, executives said they are focused on cross-selling opportunities between the two companies. Texas-based SRS serves pool, roofing and landscaping market experts, opening 20 new locations starting in June. “We believe that SRS grows faster than the core and shares each of the three verticals, so we’re very pleased with what SRS is doing,” Decker said. The weather is always fluctuating for Home Depot’s business. For example, in the third quarter reported in November, executives noted that the weather was a good tailwind throughout most of the quarter. This photo was a further mix of 4th quarter and 2025. HomeDepot said the same store’s sales growth rate of 0.8% benefited approximately $220 million in hurricane-related sales, with a growth rate of 0.65 points. At the same time, January’s “terrifying” weather across the United States had a negative impact on performance that month, CFO Richard McFail said. Executives expressed sympathy for those affected by the Los Angeles wildfires, but did not discuss the financial implications of regional reconstruction efforts that could occur this year. Guidance Home Depot provided the following guidance for 2025: Total sales growth rate of approximately 2.8%, generally in line with estimates. Sales growth for the same store at 1% below the 1.7% fact set consensus. Adjusts earnings per share, down approximately 2% from $15.24 in fiscal year 2024 compared to the conservative increase analysts expect. The total margin is approximately 33.4%, which is a consistent estimate. It is below the adjusted operating margin of approximately 13.4% and the fact set consensus of 13.7%. (Jim Cramer’s Charitable Trust is a long HD. See the full list of stocks here.) As a subscriber to Jim Cramer and CNBC Investing Club, Jim receives a trade warning before he can trade. 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On November 14th, 2023, Home Depostore is full of carts in Miami, Florida.
John Cherry | Bloomberg | Getty Images
Home Depot Although fourth quarter results were reported on Tuesday than expected, high interest rates continue to cloud the outlook for the year.
