Home Depot Shares Climb 3% to $391 on Solid Q1 Net Sales of $39.86B

Key Moments:

Stronger-Than-Expected Top Line Offsets Dip in Store Traffic and Lifts Stock

Home Depot shares enjoyed a rebound during pre-market hours on Tuesday, climbing 3% to hit $391. The gain followed the release of the company’s first-quarter earnings, which beat expectations on net sales and matched EPS estimates, offering reassurance to investors after prior market weakness.

The home improvement retailer posted adjusted earnings per share of $3.56, in line with projections from analysts tracked by Visible Alpha. Net sales, meanwhile, saw a 9% YOY increase, with the figure exceeding the forecasted $39.24 billion and hitting $39.86 billion.

In contrast to the net sales, comparable store sales dipped 0.3% in the first quarter, marginally worse than the anticipated 0.24% decrease. A bright spot emerged from the retailer’s US operations, where figures bucked analyst expectations of a decline and managed to climb by 0.2%.

Pricing Strategy and Supply Chain Shifts

Commenting on the quarter, CEO Ted Decker stated that the company’s Q1 results aligned with expectations, noting consistent customer engagement in both minor projects and spring promotional activities. He continued, conveying his satisfaction with the stores’ readiness and the product range during spring.

When speaking with CNBC, CFO Richard McPhail highlighted that the company’s goal was to maintain its existing pricing for most of its offerings. McPhail also noted that by this time next year, no single country will make up more than 10% of Home Depot’s import volume. Moreover, no less than 50% of its products will come from US sources.

Home Depot also confirmed its full-year guidance of around 2.8% growth in total sales. Comparable sales are projected to go up by 1%, while adjusted EPS will fall about 2% according to the company’s forecasts.