Home Depot Outruns Estimates Again

Seth Jayson, The Motley Fool
Updated

Home Depot (NYS: HD) reported earnings on Feb. 21. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 29 (Q4), Home Depot beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue increased and GAAP earnings per share improved significantly.

Margins grew across the board.

Revenue details
Home Depot logged revenue of $16.01 billion. The 22 analysts polled by S&P Capital IQ expected sales of $15.52 billion on the same basis. GAAP reported sales were 5.9% higher than the prior-year quarter's $15.13 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.50. The 26 earnings estimates compiled by S&P Capital IQ predicted $0.43 per share. GAAP EPS of $0.50 for Q4 were 39% higher than the prior-year quarter's $0.36 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 35.0%, 30 basis points better than the prior-year quarter. Operating margin was 8.3%, 140 basis points better than the prior-year quarter. Net margin was 4.8%, 90 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $17.45 billion. On the bottom line, the average EPS estimate is $0.60.

Next year's average estimate for revenue is $72.55 billion. The average EPS estimate is $2.80.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 3,302 members out of 4,242 rating the stock outperform, and 940 members rating it underperform. Among 1,032 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 876 give Home Depot a green thumbs-up, and 156 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Home Depot is outperform, with an average price target of $43.72.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of The Home Depot. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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