Home Depot (NYSE: HD) released its second-quarter earnings report, presenting a mixed picture for investors to decipher. While the company beat Home Depot's analyst community's earnings estimates, its lowered comparable sales guidance for fiscal 2024 caused a drop in Home Depot's share price. After the announcement, Home Depot stock fell about 5% in pre-market trading but recovered some losses in early morning trading.
Unpacking Home Depot's Q2 Earnings
Home Depot's financial report for the second quarter of 2024 revealed total sales of $43.17 billion, exceeding analysts' expectations. The company also reported net income of $4.56 billion, a number that also surpassed analysts' forecasts. However, these figures were influenced by the acquisition of SRS Distribution, which closed during the quarter. The acquisition, costing $18.25 billion, contributed $1.3 billion in revenue from six weeks of SRS sales, boosting the company's top line. This highlights the importance of analyzing a company's earnings report with a focus on underlying business performance, which is often measured by comparable sales.
Comparable sales, which track sales at stores open for at least a year, provide a more accurate indication of a company's organic growth. Home Depot's comparable sales declined by 3.3% globally during the second quarter, signifying a slowdown in customer demand for home improvement and construction projects. This decrease shows the impact of macroeconomic factors on the company's performance.
Home Depot Stock Takes a Dip After Earnings Announcement
The market reacted negatively to Home Depot's lowered comparable sales guidance. Following the announcement, the company's share price dropped about 5% in ...
