Table of Content
Home Depot's stock has risen 60.5% over the previous three years. That highlights both the solid returns it has delivered investors in that time and the reasonable rate of increase considering the boom it experienced during the pandemic. A report released Tuesday, showed that U.S. home prices rose at a faster pace in December, with mortgage rates remaining low and a falling supply of available properties. The S&P CoreLogic Case-Shiller 20-city home price index climbed 2.9% in December from a year earlier after posting a 2.5% gain in November. It's unlikely these boom times will last forever, and management has forecast revenue will stay relatively flat in 2022. The market was disappointed in these projections, and Home Depot's stock price has fallen 11% since the announcement.
The Home Depot reported a strong quarter as it continues to benefit from consumers’ increased spending on home improvement projects amid the pandemic. Some analysts think the move to not report same-store sales shows that the company's sales were weak for the period, and will stay that way. The change comes as the retailer posted a 19% jump in first-quarter profits, but sales came in below what analysts had expected, on average. Home Depot's shares have climbed about 50% since the end of February 2020, riding a more than $40 billion jump in sales during the period as stuck-at-home Americans used their time and savings on do-it-yourself home projects. The industry has been a surprising winner from the pandemic as millions of consumers spend more time at home.
Sales Manager
Home Depot has spent about $1.7 billion on temporary pay and benefits so far in 2020. Has been looking for ways to drive profits even as it slows store openings, like expanding its supply business and beefing up services. Home Depot has rolled out measures such as chartering its own cargo ship and using air freight to move in-demand goods to beat supply chain disruptions and shipping delays. The company expects operating margins to be flat in 2022, assuming inflation will not get any worse.
Growth accelerated in the fourth quarter, but a downbeat forecast for 2022 sent the stock lower. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. The slowdown in Home Depot's sales also lowers expectations for smaller rival Lowe's Cos Inc (LOW.N), which is even more dependent on DIY consumers than Home Depot, J.P. Morgan analysts said. The results still topped Wall Street's forecast of $25.75 billion.
Sales Team Manager (m/w/d)
Underlying the increase in spending, homeowners feel good about their home and its value. The number of homes available for sale remains near record lows, and that is driving up home prices. Coupled with that trend, people are doing more things at home since the onset of the pandemic, like working, learning, and exercising. That's giving rise to more wear and tear, more expansion and repurposing, and altogether increased importance of the home. But he added that he "highly" encourages the company to reinstate same-store sales reporting. "Acknowledgement that they would like investors to concentrate equally between retail and Home Depot Supply without simply concentrating on retail same-store sales is a legitimate request," he wrote in a note to clients.
Sales at stores open at least a year rose 5.2%, which was also better than analysts had expected. Net income rose 24% to $3.43 billion, or $3.18 per share, in the quarter ended Nov.1, up from $2.77 billion, or $2.53 per share, in the year-ago period. "The decision to not to report comps is likely to create some skepticism on the core retail business particularly given that retail sales were light," Morgan Stanley analyst Gregory Melich wrote in a note to clients.
(Junior) Account Manager / Sales Manager (w/m/d)
Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements. Home Depot anticipates earnings this year of about $10.45 per share, far better than analysts projections of $10.08.
Overall sales rose a higher-than-expected 10.7% in the fourth quarter to $35.72 billion, while earnings per share of $3.21 topped estimates of $3.18. In Q4, the average customer purchase was 12.3% higher than the same quarter the previous year. The coronavirus pandemic has contributed to several supply and demand imbalances worldwide, which in turn has led to rising prices. Indeed, inflation was the primary reason for higher customer-purchase totals. Commodity categories alone accounted for 185 basis points of the increase.
000+ Sales Manager Jobs in Frankfurt, Hesse, Germany
By measuring the sales movement in the stores that have an operating history, and stripping out new store openings and other expansions, industry watchers can better gauge the health of a particular retailer. After all this, Home Depot is trading at a forward price to earnings of 19.75, down from the nearly 27 it was selling for at its recent peak. The stock is not expensive, but the most cautious investors can wait to observe how consumer behavior evolves over the next few quarters before adding shares of Home Depot.
AG Edwards analyst Brian Postol said Home Depot's management is too smart to hide a weakening same-store sales trend by not reporting the data. Analysts had been expecting Home Depot HD, -1.86%to provide more clarity and break out results for its two businesses, but the absence of same-store sales data caught the Street off guard. The company, which last month named chief operating officer Edward Decker as its next top boss, projected full-year sales growth to be "slightly positive". "The margins are being pressured by a number of things including supply chain cost increases, labor cost increases and other cost inflation that they're able to pass through , but not fully offset," said Michael Baker, analyst at D.A.
And in this most recent quarter ended Jan. 30, elevated inflation helped increase sales totals at Home Depot. Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
The home improvement retailer also boosted its quarterly dividend by 10%. Sales rose 23.2% to $33.54 billion, topping analyst expectations of $32.04 billion. Digital sales increased 80%, with customers picking up about 60% of their orders in stores. "I think it would be very helpful from my perspective if you did continue to report comparable store sales growth," he said. Home Depot's quarterly second-quarter net sales rose 8.1% to $41.12 billion. The home-improvement retailer earned $4.53 on a per-share basis, beating estimates of $4.44 per share.
The stock has tumbled 28.7% year to date through Monday, while the Dow Jones Industrial Average DJIA, -0.49%has shed 11.3%. "We will continue to provide you with retail operating metrics, including sales per square foot and weighted average weekly store sales." Same-store sales rose 24.5% in the fourth quarter ended Jan.31, beating analysts' average estimate of an 18.9% increase,according to IBES data from Refinitiv. Home Depot reported a better-than-expected fourth quarter with strong comparable-store sales.
At the end of the third quarter, the company operated 2,295 retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. "This is an important data point for investors to gauge progress within the all-important retail channel, particularly as Home Depot reinvests back into the stores with departmental resets," Postol said. While bolstering sales, those expenses along with surging costs of everything from fuel to wages led to a 35-basis point decline in fourth-quarter gross margins to 33.2%. The retailer also announced that it will make permanent the temporary compensation programs it has implemented for frontline employees during the pandemic. The move will result in $1 billion of additional expenses annually.
About Reuters
He estimated that the results imply a same-store increase of 2.2%. That's on top of the nearly 20% growth it delivered in 2020 compared to 2019. To put these figures into better context, the retailing giant's compound annual growth rate for the last decade is 6.9%, which demonstrates the magnitude of the tailwind the retailer is currently benefiting from. Intraday Data provided by FACTSET and subject to terms of use.
Parkev Tatevosian has no position in any of the stocks mentioned. Tomi Kilgore is MarketWatch's deputy investing and corporate news editor and is based in New York. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. The latest figures on consumer confidence will be released Tuesday by the Conference Board, a non-profit business research group.
No comments:
Post a Comment