Q4 Earnings Highs And Lows: Home Depot (NYSE:HD) Vs The Rest Of The Home Furnishing and Improvement Retail Stocks
Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Home Depot (NYSE:HD) and the best and worst performers in the home furnishing and improvement retail industry.
Home furnishing and improvement retailers understand that ‘home is where the heart is’ but that a home is only right when it’s in livable condition and furnished just right. These stores therefore focus on providing what is needed for both the upkeep of a house as well as what is desired for the aesthetics of a home. Decades ago, it was thought that furniture and home improvement would resist e-commerce because of the logistical challenges of shipping a sofa or lawn mower, but now you can buy both online; so just like other retailers, these stores need to adapt to new realities and consumer behaviors.
The 7 home furnishing and improvement retail stocks we track reported a mixed Q4. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 0.7% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 29.9% since the latest earnings results.
Home Depot (NYSE:HD)
Founded and headquartered in Atlanta, Georgia, Home Depot (NYSE:HD) is a home improvement retailer that sells everything from tools to building materials to appliances.
Home Depot reported revenues of $39.7 billion, up 14.1% year on year. This print exceeded analysts’ expectations by 1.5%. Despite the top-line beat, it was still a mixed quarter for the company with a decent beat of analysts’ EPS estimates but a miss of analysts’ EBITDA estimates.
"Our fourth quarter results exceeded our expectations as we saw greater engagement in home improvement spend, despite ongoing pressure on large remodeling projects," said Ted Decker, chair, president and CEO.
Home Depot Total Revenue
Home Depot scored the fastest revenue growth of the whole group. The stock is down 21.9% since reporting and currently trades at $345.42.
Started in 1956 as a store specializing in French cookware, Williams-Sonoma (NYSE:WSM) is a specialty retailer of higher-end kitchenware, home goods, and furniture.
Williams-Sonoma reported revenues of $2.46 billion, up 8% year on year, outperforming analysts’ expectations by 4.5%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates and a decent beat of analysts’ EPS estimates.
Williams-Sonoma Total Revenue
Williams-Sonoma achieved the biggest analyst estimates beat among its peers. The stock is down 21.9% since reporting. It currently trades at $134.50.
Formerly known as Restoration Hardware, RH (NYSE:RH) is a specialty retailer that exclusively sells its own brand of high-end furniture and home decor.
RH reported revenues of $812.4 million, up 10% year on year, falling short of analysts’ expectations by 2.6%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates and a miss of analysts’ EPS estimates.
As expected, the stock is down 44% since the results and currently trades at $139.99.
Operating large, warehouse-style stores, Floor & Decor (NYSE:FND) is a specialty retailer that specializes in hard flooring surfaces for the home such as tiles, hardwood, stone, and laminates.
Floor And Decor reported revenues of $1.11 billion, up 5.7% year on year. This print topped analysts’ expectations by 1.9%. It was a very strong quarter as it also logged an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is down 25.4% since reporting and currently trades at $69.19.
Founded in North Carolina as Lowe's North Wilkesboro Hardware, the company is a home improvement retailer that sells everything from paint to tools to building materials.
Lowe's reported revenues of $18.55 billion, flat year on year. This number beat analysts’ expectations by 1.4%. More broadly, it was a mixed quarter as it also recorded a decent beat of analysts’ EPS estimates but full-year EPS guidance missing analysts’ expectations.
Lowe's had the weakest full-year guidance update among its peers. The stock is down 11.2% since reporting and currently trades at $215.29.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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