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Honing In on Home Depot’s Performance in Fiscal 1Q17

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Home Depot’s fiscal 1Q17 results

The Home Depot (HD) declared results for the first quarter of fiscal 2017 on May 17, 2016. The quarter ended on May 1, 2016. First quarter results for HD, the world’s largest home (XHB) (ITB) improvement retailer (XLY), surpassed expectations. The company beat Market consensus for both adjusted EPS (earnings per share) and revenue.

  • Home Depot reported sales of $22.8 billion in the quarter, an increase of 9% year-over-year. The consensus Wall Street analyst estimate had projected sales of $22.4 billion.
  • Home Depot reported diluted EPS of $1.44 in the quarter, a rise of 19% year-over-year. It beat Market consensus of $1.36.

Home Depot’s growth was primarily spurred by higher transactions at stores, unseasonably warm weather in the quarter, and higher online sales. We’ll look at these factors and their impact in greater detail in the rest of this series.

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Stacking up Home Depot’s performance against its rivals

Rival home improvement chain Lowe’s (LOW), which declared its first quarter results on May 18, 2016, also beat Market consensus for EPS and revenue. Revenue increased by 7.8% to $15.2 billion. Analysts had expected revenue of $14.9 billion.

Wayfair (W), an online home improvement and furnishings retailer and smaller rival, posted results for fiscal 1Q17 on May 9, 2016. Its sales increased 76.1% to $747.3 million. The retailer had posted an earnings miss in fiscal 1Q16, falling short of analysts’ consensus for EPS by $0.04, or 12.5%.

Williams-Sonoma (WSM) is slated to report its first-quarter results later this month. Analysts expect the company to post sales and EPS growth of 4.2% and 4.8%, respectively. WSM missed analysts’ consensus for EPS by $0.03, or 1.9%, last quarter.

In the next part of our series, we’ll see what drove Home Depot’s sales growth in fiscal 1Q17.

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