Home Depot reported a 4.8% year-over-year revenue increase to $41.77 billion for the first quarter, surpassing analyst expectations of $41.52 billion. However, earnings per share fell 3.7% to $3.43, slightly above the $3.41 forecast. Analysts have cut their price target for the stock from $420 to $360, citing the adverse impact of rising interest rates on housing-related investments.
Despite the mixed results, same-store sales growth was disappointing, with overall same-store sales up only 0.6%, missing estimates. CEO Ted Decker acknowledged the challenging economic environment for home improvement, particularly with high bond yields affecting consumer spending on large projects.
The company is focusing on maintaining market share and has made strategic acquisitions, such as Mingledorff's, to enhance its HVAC distribution capabilities. While the current operating environment is tough, analysts believe Home Depot's strong position in the market and ongoing investments could lead to recovery once conditions improve.
The company reaffirmed its 2026 sales growth forecast of 2.5% to 4.5%, which is slightly below market expectations. Overall, while the stock faces headwinds, analysts are cautious about selling at this time, suggesting potential for future gains