Home Depot Hits Estimates in Solid Quarter

Seth Jayson, The Motley Fool
Updated

Home Depot (NYS: HD) reported earnings on May 15. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended April 29 (Q1), Home Depot met expectations on revenues and met expectations on earnings per share.

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


Margins grew across the board.

Revenue details
 Home Depot logged revenue of $17.81 billion. The 22 analysts polled by S&P Capital IQ hoped for revenue of $17.89 billion on the same basis. GAAP reported sales were 5.9% higher than the prior-year quarter's $16.82 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 $0.65. The 25 earnings estimates compiled by S&P Capital IQ predicted $0.65 per share. GAAP EPS of $0.68 for Q1 were 36% higher than the prior-year quarter's $0.50 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 34.7%, 10 basis points better than the prior-year quarter. Operating margin was 9.6%, 110 basis points better than the prior-year quarter. Net margin was 5.8%, 100 basis points better than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $20.82 billion. On the bottom line, the average EPS estimate is $0.98.

Next year's average estimate for revenue is $74.05 billion. The average EPS estimate is $2.94.

Investor sentiment
 The stock has a three-star rating (out of five) at Motley Fool CAPS, with 3,351 members out of 4,287 rating the stock outperform, and 936 members rating it underperform. Among 1,113 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 955 give Home Depot a green thumbs-up, and 158 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 $52.67.

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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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