Home Depot $HD just can’t seem to turn the corner.
The company reported mixed results, and once again, the market punished the stock.
This marks the 3rd negative earnings reaction in the last 5 quarters.
It’s not hard to see why the market is consistently punishing the stock for reporting earnings.
Margins are under pressure.
Earnings are declining.
And guidance? Not encouraging... Management expects another drop in EPS for fiscal 2025.
That’s not the kind of fundamental story investors want to back right now.
This isn’t just a bad quarter. It’s a negative fundamental trend.
The market continues to respond in the same way: sell first, ask questions later.
So what else did we learn from the Home Depot earnings report? Let’s dive into the details.
Here are the latest earnings stats for HD 👇
*Click the image to enlarge it
Home Depot $HD fell 0.61% and had a reaction score of -0.17 after reporting mixed results.
The company reported revenues of $39.85B, versus the expected $39.29B, and earnings per share of $3.45, versus the expected $3.51.
Now let's dive into the data and talk about what happened with the HD report 👇
HD has been punished for 3 of its last 5 earnings reports:
Home Depot fell 0.6% after this earnings report, and here's why:
Despite a 9.4% increase in sales, comparable sales were essentially flat. This suggests that growth was driven more by acquisitions and less by organic demand.
Net earnings declined 4.6% year-over-year
Guidance for fiscal 2025 was reaffirmed, but it anticipates a decline in diluted EPS of ~3% and adjusted diluted EPS of ~2% compared to fiscal 2024.
The consistent negative earnings reaction we've seen over the last 5 quarters suggests that the market is not satisfied with the fundamental story here.
For one of the world's largest retailers to struggle this mightily is a significant red flag for Consumer Discretionary bulls.
Since the stock peaked in late 2021, the price action has been incredibly sloppy.
This is a trend-followers' worst nightmare...
However, the long-term trend is shaping up into a massive accumulation pattern. If the bulls can resolve it and decisively take control, our negative bias towards the stock will change.
If HD is below 420, the path of least resistance is likely to remain sideways for the foreseeable future. A breakout above that level would shift the path of least resistance to the upside.
Thank you for reading.
- The Beat Report Team
P.S.: Retail tells a story — and Jeff Macke knows how to read it. From Walmart earnings to trends at Target and Home Depot, he’s breaking down what’s really moving the consumer. If retail’s in play, Macke’s on it, and you can stay up to speed with his Retail Roundup portfolio.
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