For the next four quarters, analysts are expecting Home Depot (HD) to post revenues of $104.3 billion, which represents growth of 5.1% from $99.2 billion in the corresponding four quarters of the previous year.
The revenue growth is expected to be driven by positive SSSG (same-store sales growth), the addition of new stores, and the acquisition of Compact Power Equipment. The company acquired Compact Power Equipment, which provides equipment rental and maintenance services, in July 2017. The acquisition could enhance equipment and tool rental offerings for professional customers.
Home Depot’s SSSG is expected to be driven by an increase in the breadth of assortment, enhancement of customer experience through implementation of technological advancements, and marketing and promotional initiatives. In 4Q17, the company has introduced the Dewalt Flexvolt cordless air compressor and the Akita LXT product line. With online sales growing at 19.0%, the company has been piloting various delivery options, which could also contribute to the company’s SSSG.
Management’s 2017 guidance
With expectations that recovery efforts could continue in 4Q17 as well, Home Depot has increased its 2017 SSSG and revenue guidance. The company has increased its SSSG guidance from 5.5% to 6.5%, while revenue guidance rose from 5.3% to 6.3%.
Next, we will look at Home Depot’s 3Q17 margins.