Home Depot (NYSE:HD) gained in morning trading after reporting Q2 earnings. Analysts think the Home Depot (NYSE:HD) report could be an indication that the housing market has bottomed and is now turning a corner based on the late quarter improving trend.
The company (HD) reported revenue rose 4.8% year-over-year to $45.3 billion during the quarter. Comparable sales increased 1.0% for the quarter that ended on August 3 to miss the consensus expectation for an increase of 1.4%. During the quarter, foreign exchange rates negatively impacted total company comparable sales by approximately 40 basis point.
Comparable customer transactions fell 0.4% year-over-year, while comparable average ticket for customers was up 1.4%. Total customer transactions fell 0.9% to 446.8 million. Total average ticket was up 1.2% to $90.01.
On the earnings conference call, Home Depot (HD) reaffirmed its fiscal 2025 guidance, projecting total sales growth of approximately 2.8% and comparable sales growth of around 1%. The company also guided for FY25 adjusted operating margin expected to be approximately 13.4% and EPS to decline approximately 3% compared to fiscal 2024.
On the topic of tariffs, Home Depot (HD) highlighted that over 50% of its products are sourced domestically and wouldn’t be subject to any tariffs. However, some of the important goods were highlighted as having tariff rates that are significantly higher today than they were when the company reported in May. “So as you’d expect, there’ll be some modest price movement in some categories, but it won’t be broad-based,” updated management.
On Wall Street, Morgan Stanley analyst Simeon Guitman said the bull case on Home Depot (HD) is for a comparable sales acceleration that would either be driven by a faster housing recovery or signs of complex projects beginning to pay off. Bullish-leaning Evercore ISI took solace in the improved comparable sales trend and guidance for gross margin improvement.
Shares of Home Depot (HD) were up 3.3% at 11:28 a.m. Lowe’s (LOW) showed a 2.0% gain.