The Home Depot stock advances as Q1 comparable sales outperform consensus

The Home Depot management says it endeavors to keep prices flat in face of tariffs.
US comparable store sales gained 0.2% compared to the -0.2% expectation.
HD stock rises near 2% following Q1 results.
Lowe's stock also gains ahead of its own earnings release on Wednesday.

Clay Webster FXStreet

The Home Depot (HD), one of the United States' two primary hardware store retailers, reported first-quarter results early Tuesday that impressed a worried market. Comparable sales, while down globally, were better than analysts had projected. Management also kept a stiff upper lip in the face of the Trump administration's new tariff policies, saying it wouldn't need to raise prices.

The Dow Jones Industrial Average (DJIA) futures are slightly up in the premarket, while NASDAQ 100 and S&P 500 futures are moderately lower.

The Home Depot earnings news

The Home Depot reported adjusted earnings per share (EPS) of $3.56, or 3 cents behind the Wall Street consensus. As expected, adjusted EPS was down from the year ago figure of $3.67.

Revenue of $39.86 billion, however, was $610 million above consensus and rose 9.5% from a year earlier.

Globally, comparable sales were -0.3% YoY, worse than the -0.2% decline expected, but US comparable sales were much better. The latter emerged at a positive 0.2% YoY compared to the -0.2% consensus.

Pointing to switching suppliers to counteract tariffs, CFO Richard McPhail said, "Because of our scale, the great partnerships we have with our suppliers and the productivity that we continue to drive in our business, we intend to generally maintain our current pricing levels across our portfolio."

Customer transactions rose 2.1% YoY, a good sign since they have been falling in most quarters over the past three years. The average ticket price in Q1, meaning customer receipt, was flat YoY at $90.71.

Comparable sales still fell overall from a year earlier, but the market took heart that they were well off their nadir in 2023 and 2024.

For the full fiscal year 2025, management expects revenue to rise 2.8% on an annual basis and for adjusted EPS to fall about 3% from 2024.

The Home Depot stock forecast

HD stock jumped to near $390 at the open, which is key because it breaks through the 200-day Simple Moving Average (SMA). HD shares have been in a downtrend with the 50-day trailing its 200-day counterpart since the onset of the new tariff regime in early April.

Support and resistance are couched close to one another. The $396 level acted as resistance late last year and then again in February. It should prove to be an obstacle once again.

Support rests between $370 and $380 as that range has welcomed plenty of volume over the past week, as well as a point of resistance in August 2024.

HD daily stock chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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