Home Depot is expected to report profits before the bell. Here’s what to expect

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People wear face masks outside the Home Depot in the Flatiron neighborhood as the city continues with Phase 4 of the reopening following restrictions imposed to slow the spread of the coronavirus on August 8, 2020 in New York City.

Noam Galai | Getty Images

Home Depot is expected to release its fourth quarter financial results before the bell Tuesday.

Here’s what Wall Street expects, based on Refinitiv’s consensus estimates:

  • Earnings per share: $ 2.62, expected
  • Revenue: $ 30.73 billion, expected

The retailer’s results will indicate whether pandemic trends and the real estate market continue to increase home improvement sales. The business is also gearing up for spring, which is typically its busiest season.

During the pandemic, Americans had a “nesting” mentality and their homes served a wide range of purposes, from the remote classroom and the office to the gym. Consumers have embarked on DIY projects and hired home improvement professionals. Some have left densely populated cities and bought homes in suburban or rural areas, as they are looking for more space or taking advantage of low interest rates.

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At Home Depot, it drove business. Its comparable store sales in the United States grew by about 25% in the second and third quarters, as consumers visited the stores and the retailer’s website more and spent more money. Its digital sales were up 80% year-over-year in the third quarter, with customers picking up most of those online orders in stores.

Analysts expect Home Depot’s same-store sales to grow 19.2% in the fourth quarter, a big gain but a slower pace than the peak of the pandemic, according to a StreetAccount survey.

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Home Depot did not provide an outlook for the year. He faces tough comparisons in the quarters to come due to the large numbers he presented during the pandemic. He may also have to work harder on wallet sharing, as consumers get vaccinated against Covid-19 and spend weekends at dinner or on vacation instead of painting or doing repair projects. Its sales could, however, be supported by a rebound in the activities of home professionals, as consumers feel more comfortable inviting people to their homes and paying for projects that they have postponed or that they do not. could not do it alone.

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About 45% of Home Depot’s sales come from professionals, such as plumbers, electricians, and contractors, with the remainder coming from DIY customers. That’s a higher percentage of its rival Lowe’s, who gets 20% to 25% of its sales from the pros. The Home Depot also has larger home professionals as clients.

Home Depot could take advantage of this advantage with HD Supply. It acquired the former unit of the company and a major distributor of industrial products in November in a deal valued at $ 8 billion.

As of Monday’s close, Home Depot shares are up more than 12% from a year ago. The market value of the company is $ 296.98 billion.

This story is developing and will be updated.

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