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Home Depot Inc., the world’s largest home improvement retailer, in its Q4 earnings call highlighted a cautious outlook for 2025, projecting 1% comparable sales growth amid continued pressure on larger remodeling projects due to high interest rates, despite some improvement in housing turnover. Management reported positive transaction comps for the first time in over three years, with broad-based growth across half its merchandise categories, indicating that COVID-related demand shifts have largely normalized. Management highlighted their Pro ecosystem expansion generating $1 billion in incremental sales across 17 markets with enhanced capabilities. The company explained that adjusted operating margin will decrease by 40 basis points year-over-year due to natural deleverage, SRS inclusion, and 53rd-week comparison, while maintaining their long-term model of 3-4% sales growth once the market normalizes.

Home Depot broke its eight-quarter streak of declining comparable sales with a 0.8% increase, exceeding analyst expectations with $3.13 EPS and $39.7 billion revenue. The company saw 14% revenue growth year-over-year with improvements across half of merchandise categories, most U.S. regions, and 9% growth in online sales. Despite this success, the company faces ongoing challenges from high interest rates and housing prices affecting large remodeling projects. For fiscal 2025, the company projects modest growth with total sales increasing by 2.8% and comparable sales up approximately 1%, though adjusted earnings per share are expected to decline by about 2%. Consumer engagement improved with transactions increasing 7.6% to 400.4 million, while operating expenses grew faster than revenue with SG&A costs up 15.7%.

Continue Reading: Unearth the Vital Insights from Home Depot Inc.’s Earnings Call!

Financial/Operational Metrics:

FY25 Outlook:

Analyst Crossfire:

The post HD Q4 Call Highlights: Comps Climb, Pro Sales Soar and Market Uncertainty! first appeared on AlphaStreet.

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