Home Depot Inc Earnings Model (Munamala & Jhamb)
Author: Sahyaja Munamala & Rhea Jhamb, Published: February 23, 2020 2:32pm, Category: Earnings Preview
Summary of Model: This earning forecast model takes on a bullish view on Home Depot based on various driving forces that have been evaluated. The different factors that have influenced the forecast include retail, services, and sales. Black Friday and the holiday season allows for a sales boost, especially with the inclusion of BOPIS and other customer service expansion operations. Companies that offer BOPIS can often see up to a 10% increase in their sales. This holiday season was a record breaking for online sales and this translates into our forecast. We predict that the FY2019Q4 Gross Margin will decrease to 33.7%. Our gross margin projection was influenced by the deflation in lumber and copper and by the increase in costs due to tariffs. While tariffs and increasing costs may be mitigated the effects we believe is still going to affect them in the fourth quarter.
Disclosure of Potential Conflicts of Interest: The author of this article/model has no financial investment or other conflict of interest related to the subject company or other companies discussed. Any views made or implied in the content represent the author’s opinions.