Home Depot Inc Earnings Model (Rana)
Author: Rahul Rana, Published: February 23, 2020 1:45pm, Category: Earnings Preview (Prior to Fiscal 4Q2019 earnings)
Summary of Model: I am bullish on Home Depot's future F4Q19E due to many key factors and projects. First, the latest Earnings Call transcript cited that HD has been focusing on long-term strategic initiatives that has been gaining momentum. Second, it was stated that "during the third quarter, big-ticket comp transactions, or those over $1,000, which represent approximately 20 percent of U.S. sales, were up 4.8 percent. Excluding hurricane-related markets, big-ticket comp transactions were up 5.5 percent." The steady growth only creates optimism. Third, the growth prospects in the housing and macro environments boost HD in my opinion, as population and immigration rates are increasing, cities are growing, and communities are being developed every day. Finally, all US, Canada, and Mexico divisions posted positive comps in the third quarter, and sales reached $27.2 billion— an increase of 3.5 percent versus last year. Comp sales specifically were up 3.6 percent from last year, so considering the greater environment and the industry-specific trends HD is affected by, I am confident with the results of my model.
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.