Home Depot Due As Inflation And Economic Jitters Grow

Home Depot (HD) prepares to report earnings early Tuesday amid ongoing worries about inflation and new jitters about President-elect Donald Trump’s economic agenda.

The Home Depot earnings report will tee off big-box retail earnings season, with investors closely watching the state of consumer health after three years of inflation.

Lowe’s (LOW) and Walmart (WMT) are due on Nov. 19. Target (TGT) is on deck Nov. 20.

Home Depot Earnings

Estimates: Analysts project a 4% earnings decline to $3.65 per share, according to FactSet. They see revenue rebounding 4%, year over year, to $39.309 billion. That would mark the second quarterly sales gain after five quarters of declines.

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Same-store sales are forecast to fall 3.1%, which would be the eighth consecutive decline. The last time the Dow retailer recorded a same-store sales increase was Q3 2022.

Home Depot recently acquired SRS, which sells and distributes landscaping, roofing and pool supplies.

Results: Check back Tuesday before the market opens.

Outlook: For the full year, Wall Street forecasts a 0.9% earnings decline per share and a 3.2% revenue increase. The company in August guided a 1%-3% EPS drop for the full year and a 2.5%-3.5% sales comeback, thanks to a boost from SRS.

Home Depot’s earnings sank almost 10% last year and sales fell 3%.

Home Depot Stock

The home improvement retailer’s stock moved up 0.6% to 408.45 on the stock market today. Home Depot stock rebounded from the 50-day moving average last week and is now above the 10- and 21-day lines.

The stock chart shows the retailer extended from a September breakout past a 378.58 cup-with-handle buy point, according to MarketSurge. That means shares are not in a proper buy range.

Lowe’s and Target also gained on Monday, but shares of Walmart fell.

Double Whammy For Home Improvement Retailers

Home improvement companies face a double challenge: higher mortgage rates and financing charges, as well as greater economic uncertainty.

The average 30-year mortgage rate remains above 6% — and is likely to stay that way for a while. Retailers including Home Depot said steep rates led consumers to delay home purchases and renovations.

A still-strong economy and economic uncertainty are combining to keep interest rates high. Now, investors are worried about the impact of the incoming Trump administration’s tax and tariff plans.

Despite two Federal Reserve rate cuts this year, Trump’s economic policies could reignite inflation and worsen the deficit, experts say.

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