Home Depot (HD) Puts on Its Hard Hat, Lowers Sales Outlook Citing Consumer Spending Needs Repair

Today the global home improvement retailer Home Depot (HD) reported Q2 earnings that beat estimates on EPS $4.60 vs FactSet $4.53 and revenues $43.18B vs FactSet $42.57B. However, as it relates to the company’s outlook, guidance was dismal. Home Depot now expects its full year comparable sales to decline by 3-4% with the prior fiscal year, compared to previous guidance of a 1% decline. Sales are expected to be weaker in the back half of the year due to high interest rates and continued consumer spending uncertainties.

This year Home Depot made its largest acquisition purchasing SRS Distribution for $18.3Bn. SRS is a large building-projects supplier that includes professional roofers, landscapers and pool contractors as its main customers. The company cited the SRS segment was showing strong performance and is expected to grow in the high single digits for 2024. This growth is driven equally by organic expansion and acquisitions with the intention to continue its aggressive growth strategy into 2025. As it looks to the future, Home Depot intends to drive its Pro market focus forward with continued investment in its professional customer segment.

“The underlying long-term fundamentals supporting home improvement demand are strong,” said Ted Decker, chair, president and CEO. “During the quarter, higher interest rates and greater macro-economic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects. However, the team continued to navigate this unique environment while executing at a high level. I would like to thank our associates for their hard work and dedication to serving our customers and communities.”