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Wall Street Expects Home Depot’s Revenue Growth to Slow in 2019

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Analysts’ revenue expectations

For 2019, Home Depot’s (HD) management has set a revenue growth guidance of 3.3%, which accounts for one extra week of operations in 2018. For the same period, management also expects the company to post SSSG (same-store sales growth) of 5.0% and open five new stores.

Analysts expect Home Depot to post revenue of $111.59 billion in 2019, which represents growth of 3.1% from $108.20 billion in 2018. Home Depot’s revenue growth will likely be driven by positive SSSG and the addition of new stores, partially offset by one fewer week of operations.

Home Depot is focusing on improving its delivery and fulfillment options, improving customer satisfaction, enhancing customers’ experience through an interconnected shopping experience, and expanding its product offerings to drive sales.

In June, management announced a $1.2 billion investment over the next five years to strengthen its supply chain and improve delivery speeds. The company plans to build 170 distribution facilities during this period, which would enable it to deliver products to 90% of the US population within a day.

Home Depot launched a new B2B website experience that delivers more personalized product offerings to professional customers. The company plans to expand the service to more than 1 million professional customers from 100,000 professional customers at the end of the fourth quarter.

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Analysts’ EPS expectations

For 2019, Home Depot’s management expects its diluted EPS at $10.03, which represents growth of 3.1% from $9.73 in 2018. For the same period, analysts expect the company’s adjusted EPS at $10.10, which represents growth of 2.2% from $9.89 in 2018.

Next in this series, we’ll look at analysts’ expectations for Lowe’s Companies (LOW) in 2019.

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