First-quarter performance

Home Depot (HD) reported its fiscal 2019 first-quarter earnings results on May 21. For the quarter, which ended on May 5, the company posted adjusted EPS of $2.27 on revenue of $26.38 billion. Year-over-year, the company’s adjusted EPS rose 9.1%, while its revenue rose 5.7%.

Home Depot Beats Analysts’ Revenue and EPS Estimates in Q1

Stock performance

During the quarter, Home Depot outperformed analysts’ EPS estimate of $2.18, while its revenue was marginally higher than analysts’ expectations. However, the company’s global SSSG (same-store sales growth) came in at 2.5%, falling short of analysts’ expectation of 4.2%. The company’s management blamed wet weather conditions in February and deflation in lumber prices for its lower-than-expected SSSG. You can read more about what analysts were expecting from Home Depot before its earnings call in Can Home Depot Maintain Its Upward Momentum?

After the company posted its first-quarter earnings results, its management reiterated its 2019 EPS guidance of $10.03, which was lower than analysts’ expectation of $10.09. On May 21, the company’s stock fell to the day’s low of $186.34 before rising to close at $191.45, a jump of 0.3% from its previous day’s close.

Year-to-date performance

In 2019, Home Depot has been lagging the broader equity market. YTD (year-to-date), the home improvement retailer has returned 11.4%, while the S&P 500 Index has risen 14.3%. In comparison, Home Depot’s peers Lowe’s Companies (LOW), Williams-Sonoma (WSM), and Bed Bath & Beyond (BBBY) have returned 20.3%, 8.2%, and 30.0%, respectively.

Series overview

In this series, we’ll be looking at Home Depot’s performance in the first quarter of fiscal 2019. We’ll also cover its management’s guidance and analysts’ expectations for 2019. In the end, we’ll look at Home Depot’s valuation multiple and analysts’ recommendations.

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