Home Depot Q4 results: shares fall 2% after earnings revenue misses estimates

Home Depot's stock declines after a disappointing Q4 earnings report.

Home Depot stock has fallen after a lackluster fourth quarter (Q4) earnings report. Home Depot’s Q4 results were below Wall Street expectations.

Home Depot earnings: key figures

Earnings per share (EPS) $2.09
Revenue $26.49 billion
Net Income $2.34 billion
Same Store Sales + 3.2%

Home Depot earnings

Home Depot’s earnings per share were $2.09, less than the predicted $2.16. While Home Depot’s revenue grew 11% more than at the same time in 2018 to $26.49 billion, it was less than the projected $26.57 billion. The retailer’s same store sales jumped by 3.2%, but didn’t match the 4.5% increase that financial experts expected.

Home Depot chief executive officer, (CEO), Craig Menear, blamed the harsh US winter for Home Depot’s Q4 results.

‘What we didn’t plan for was the extent of the unfavorable weather we experienced in all regions throughout the quarter. It was cold, it was snowy, and perhaps worst of all, it was wet. Wet weather delays projects, and this was evidenced in our sales performance in the quarter,’ said Menear.

GlobalData Retail managing director,Neil Saunders, noted that the rise of mortgage rates and the US housing market decline are also contributing to the disappointing Home Depot Q4 earnings.

‘A material slowdown in the housing market - where both sales and prices have been under pressure for some time — has stymied demand for home improvement products. In our view, this has likely affected the momentum of growth at Home Depot,’ said Saunders.

While in-store sales dropped, one bright spot for Home Depot Q4 revenue was in e-commerce. The retailer’s online sales increased 22.7% as the company tries to compete with Amazon.

What do Home Depot’s Q4 results mean for their share price?

Home Depot’s Q4 results mean a decline for its share price. Home Depot stock has fallen by 2% after the lackluster earnings report.

How do Home Depot’s Q4 results compare to other home improvement retailers?

Home Depot’s Q4 results could have similar results to Lowe’s when the retailer's results are released later this week. Both home improvement stores could be affected by inclement weather and a housing slowdown.

What is Home Depot’s dividend forecast?

Home Depot’s dividend forcecast is high. The retailer shared that the dividend would be $1.36 a share, an increase of 32%. The company also announced a $15 billion share buyback program. The corporation expects earnings per share to grow to $10.03 per share, $0.23 less than financial experts predicted. Home Depot revenue is projected to increase by 3.3%.

Menear said the ‘the health of the economy and the consumer, as well as the momentum of our[Home Depot’s] strategic investments,’ in online sales may help Home Depot’s Q1 earnings.

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