Home Depot’s revenue estimates
Analysts expect Home Depot (HD) to post revenue of $99.0 billion for 2017, a rise of 4.6% from its 2015 revenue of $94.6 billion. The company’s management has also set revenue growth guidance of 4.6% for 2017.
Home Depot’s revenue growth is driven by growth in online sales, positive same-store sales growth (or SSSG), and the addition of new stores. The company’s management has set 2017 SSSG guidance of 4.6%, and it also expects to add six new stores this year.
Home Depot’s SSSG is expected to be driven by enhanced customer experience through the implementations of the Buy Online Deliver From Store program and the customer order management system. The availability of Interline’s catalog of products in Home Depot stores and the next line of integration, which lets customers buy in Home Depot stores with Interline accounts, are expected to contribute to Home Depot’s 2017 SSSG.
Lowe’s revenue growth
Analysts are expecting Lowe’s (LOW) to post revenue of $68.3 billion, which represents growth of 5% from $65.0 billion in 2017. The company’s management has also set revenue growth guidance of 5% for 2017.
Revenue growth is expected to be driven by SSSG of 3.5%, and the addition of about 35 home improvement and hardware stores in the next 12 months. Lowe’s SSSG is expected to be driven by enhanced online selling tools, its strong value proposition, and its improved marketing.
Apart from these drivers, favorable macro factors such as rising house price indices and the improving US economy are expected to contribute to revenue growth for both companies in 2017.
Next, we’ll look at Home Depot and Lowe’s margins in 4Q16.