Home Depot expects slight decline in 2024 sales as hurricane rebuilding boosts quarter By Reuters
Written by Savyata Mishra
(Reuters) – Home Depot forecast a slight decline in annual same-store sales on Tuesday, benefiting from strong demand for professional contractors, and increased hurricane-related expenses.
Shares of the top US home development chain rose nearly 2% in premarket trading as it again posted better-than-expected quarterly results, reflecting rising demand amid expectations of lower mortgage rates.
“As the weather becomes more normal, we’ve seen better alignment between seasonal supplies and certain outdoor projects and increased sales related to hurricane demand,” CEO Ted Decker said in a statement.
Parts of the southeastern US, including Florida, were hit by hurricanes in late September and early October, causing Americans to panic buy.
Hurricane Helene, which tore through Florida and devastated large areas of the Southeast US in late September, was followed 14 days later by Hurricane Milton.
The Home Depot (NYSE:) has faced tough demand over the past two years, as persistent inflation and high borrowing costs have prompted customers to put major home remodeling projects on hold and focus on maintenance and repair work for their existing homes.
Investors are likely to consider a post-earnings call to comment on the outlook for the industry after the US Federal Reserve began cutting interest rates.
While it eases pressure on mortgage rates, the reduction is expected to lower borrowing costs for homeowners looking to fix up their properties to sell, benefiting Home Depot and its peers.
“While the Fed’s interest rate cuts should help boost demand, it’s not a magic bullet especially if the Trump administration implements rate hikes that cause prices to rise,” said Zak Stambor, an analyst at Emarketer.
Home Depot has also doubled down on investments to attract a “professional” customer, including its $18.25 billion deal for SRS in March.
Shares of rival Lowe’s (NYSE: ) were up 1.2% before the bell. The company is expected to report quarterly results next Tuesday.
Home Depot posted a 1.3% decline in comparable sales, its eighth straight quarter of decline, compared with analysts’ average estimate of a 3.25% decline, according to data compiled by LSEG.
It earned $3.67 per share, beating estimates of $3.64.
Comparable sales are expected to decline 2.5% in fiscal year 2024, compared to the previous range of 3% to 4% decline.
