The Home Depot’s stock rose by 3.8% following the release of its fiscal fourth-quarter earnings. Although CFO Richard McPhail stated the US housing market may not recover until 2025, market focus remained on the improved comparable sales.
Lowe’s stock initially dropped but then gained over 2% later in the morning. The Dow Jones Industrial Average was slightly lower amid news of tariffs on Canada and Mexico and potential restrictions on Chinese semiconductor purchases, causing the NASDAQ to decline by more than 1.7%.
Home Depot reported an adjusted earnings per share of $3.13, surpassing estimates, with revenue of $39.7 billion. Adjusted EPS increased by 11% year-on-year, with a 14% rise in revenue.
Worldwide comparable sales rose by 0.8%, and US comparable sales grew by 1.3%, reversing a prior decline. Despite concerns over the housing market, McPhail noted encouraging trends in the home improvement sector.
Management anticipates total sales growth to decrease from 3.4% in 2024 to 2.8% in 2025, with adjusted diluted EPS expected to fall by 2%. The Home Depot Board increased the quarterly dividend by 2.2% to $2.30 per share.
Technically, the stock price is around the 200-day Simple Moving Average, and current patterns suggest potential profit-taking near the 100-day SMA, which is around $407. Resistance levels are identified above $435, indicating key price dynamics from previous weeks.
Home Depot’s stock climbed by 3.8% after revealing stronger-than-expected quarterly earnings. Despite Richard’s caution that the US housing market may not bounce back until 2025, investors latched onto the company’s solid comparable sales figures. Those gains seemed to outweigh broader economic concerns.
Lowe’s experienced a shaky start, falling initially before recovering more than 2% as the morning progressed. The Dow was under some pressure, reflecting nervousness around fresh trade developments. New tariffs on Canada and Mexico, combined with warnings about possible restrictions on Chinese semiconductor imports, played into market sentiment. That spooked tech-heavy stocks, dragging the NASDAQ down by over 1.7%.
Home Depot outperformed earnings expectations, reporting an adjusted $3.13 per share, with total revenue reaching $39.7 billion. That meant earnings per share were up by 11% compared to the previous year, alongside a 14% boost in revenue. Those are not the kind of numbers that indicate a weakness in consumer activity—at least not in home improvement.
Comparable sales are often the first thing investors examine, and here they showed strength. Global comparable sales edged up by 0.8%, with US comparable sales improving by 1.3%. That reversed a previous setback, an encouraging sign. Richard acknowledged that while the broader housing market remains uncertain, demand for home renovations exhibits resilience.
Looking ahead, management’s forecasts suggest that total sales growth may slow from 3.4% in 2024 to 2.8% in 2025. Expectations for adjusted diluted EPS are even more cautious, with a projected 2% decline. Even so, Home Depot’s board approved a slight increase in quarterly dividends, raising them by 2.2% to $2.30 per share. Growth prospects may not be accelerating, but there is still a commitment to rewarding shareholders.
From a technical standpoint, Home Depot’s share price sits around the 200-day Simple Moving Average, which often acts as a reference point for buyers and sellers alike. With the price advancing over recent weeks, some profit-taking could emerge near the 100-day SMA, sitting around $407. Looking further up, resistance levels above $435 stand out as areas where the stock found friction recently. Those points could define price movement in the coming sessions, particularly if broader market sentiment shifts.
