Home Depot (NYSE: HD) shares surged about 4% during midday trading on Tuesday after the top home improvement chain posted fourth-quarter results that outpaced Wall Street expectations. However, a weaker-than-expected guidance for 2025 kept the earnings celebration in check.
The Atlanta-based company reported adjusted earnings per share (EPS) of $3.13 on revenue of $39.70 billion for the quarter. Analysts polled by Visible Alpha had expected $3.03 per share and $39.12 billion in revenue.
Home Depot offered a cautious outlook for 2025, forecasting total sales growth of about 2.8% and a 1% rise in comparable store sales. Analysts, however, had projected more robust growth—3.27% for total sales and 1.88% for comp sales. Adjusted EPS is expected to slide roughly 2% from $15.24 in 2024, while analysts had expected an uptick to $15.63.
On a brighter note, Home Depot (NYSE: HD) boosted its quarterly dividend by 2.2%, raising it to $2.30 per share, signaling confidence in its cash flow despite the cautious outlook.
Comp Sales Snap Losing Streak
The retailer said its comparable store sales rose 0.8% year-over-year in Q4, snapping an eight-quarter decline. Analysts had braced for a 1.48% drop, making the gain a standout surprise. The metric wasn’t expected to turn positive until Q1 2025, so this early rebound lifted spirits.
HD and rival Lowe’s (NYSE: LOW) have faced headwinds from inflation and a post-pandemic slump in home improvement projects, which have weighed on sales in recent quarters. Lowe’s will report its fourth-quarter results on Wednesday, providing another data point for the sector’s trajectory.
