What Drove Home Depot’s Revenue in Q1?



First-quarter performance

In the first quarter of fiscal 2019, Home Depot (HD) posted revenue of $26.38 billion, slightly above analysts’ expectations. Year-over-year, the company’s revenue rose 5.7% from $24.95 billion in the first quarter of fiscal 2018. Its revenue growth was driven by positive SSSG (same-store sales growth) of 2.5% and the net addition of new stores in the last four quarters.

However, unfavorable currency translations, wet weather conditions in February, and deflation in lumber prices offset some of the growth in Home Depot’s revenue. The strengthening of the US dollar negatively affected the company’s revenue by $76 million.

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Revenue drivers

For the quarter, Home Depot has posted overall SSSG of 2.5% with its SSSG in the United States coming in at 3.0%. In the United States, 17 out of 19 regions posted positive SSSG. In Mexico, the company’s SSSG was positive in its local currency. However, the company’s SSSG in Canada was negative. We’ll discuss the company’s SSSG drivers in our next article.

By the end of the quarter, Home Depot operated 2,289 stores, a rise of four from its count of 2,285 at the end of the first quarter of fiscal 2018. The company opened two new stores during the quarter. Overall, the company had a total selling area of 238 million square feet. For the quarter, the company’s sales per square foot stood at $435.18, implying a rise of 5.6% from $412.03 in the corresponding quarter of 2018.

Peer comparison

For the comparable quarter, analysts expect Lowe’s Companies (LOW), Williams-Sonoma (WSM), and Bed Bath & Beyond (BBBY) to post revenue changes of 1.7%, 2.9%, and -6.1%, respectively.


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