The home retail giant
HOME DEPOT
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(NYSE: HD) reported revenue in the fourth quarter of $ 35.72 billion, above analysts’ expectations of $ 34.87 billion. Earnings per share also exceeded forecasts when they totaled about $ 3.21, 3 cents above the expectation of $ 3.18 per share.
The stock is now down in Wall Street trading and market sources estimate that this is the effects of security tensions in Eastern Europe alongside the company’s conservative growth forecast for the coming quarters.
Earnings were about $ 3.35 billion, a 17% increase over earnings last year, then totaling about $ 2.86 billion or about $ 2.65 per share. Sales in same-store stores grew by 8.1%, compared to analysts’ expectations of 5%. Within the United States alone, the figure increased by about 7.6%. The company will increase its dividend by 15% last year and it will now total $ 1.9 per share.
The number of transactions in the quarter amounted to about 402.5 million, while the average transaction value was $ 85.11 per transaction, compared to last year when the number of transactions amounted to about 416.8 million while the average transaction value was $ 75.69 per quarter.
Sales per square meter amounted to $ 571.79, an increase compared to last year, when the figure amounted to $ 528.01 per square meter. For this figure, the company noted that the number of customers who have taken on larger projects or alternatively hire the services of a contractor who will carry out the home renovation work for them has increased in the quarter.
Home Depot now predicts that the company’s profits will grow at a rate of a few digits while the sales rate will add up in a similar way as well. These forecasts more or less meet market expectations, which are now waiting for a 2.5% increase in sales and a 4.7% profit for the full year.
What’s the story with Home Depot?
For many, the retailer is considered one of the big “winners” of the Corona plague, thanks to the increase in the number of Americans who have taken on DIY tasks – do it yourself during the period.
In addition, the fact that the American millennial generation (considered to be the largest in the country) has in recent years begun to leave home and settle in its first homes, or alternatively to larger homes also helped the company during the quarter, despite the fact that the “second generation” baby boomers Its size in the United States hardly moved to new homes during this period and thus “slowed” the trend slightly in this aspect.
This fact has contributed to the retail giant in the most significant way in that it has increased the demand, reduced the supply and as a result – raised the prices, both of the goods and of the real estate markets.
The American real estate market itself has also “aged”, with a considerable number of apartments recently required to undergo more renovations. Add this figure to the fact that many young people have recently started working from home following the plague, which led to their patience running out. They must fix the hole in the wall or the leak in the sink.
Many investors are now wondering if the US housing market will cool down in the near future as many consumers digest the lack of continued support from US government grants, rising prices following inflation and re-budgeting of their monthly expenses when they are sometimes forced to choose between renovation and vacation.
The monthly mortgage repayment is also expected to increase in the near future, which will affect consumer discretion as much as possible, and may lead some to postpone the purchase or renovation of the apartment to a later date in the future.
The forward forecast, as positive for the company, naturally indicates more conservative expectations on the part of Home Depot. At the beginning of March, the company will replace a CEO when the company’s chief operating officer, Ted Decker, will replace the current CEO, Craig Maner, who will continue to serve as a director of the company.
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