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Home Depot (HD) will be kicking off the earnings week for major retailers, releasing first quarter results before Tuesday's market open.
Yahoo Finance senior retail reporter Brooke DiPalma comes on Market Domination Overtime to explain what Wall Street is expecting out of the home improvement store's latest figures and guidance forecasts, especially coming off of the Trump administration's tariff policies in 2025.
After reporting earnings, Walmart (WMT) CFO John David Rainey spoke to Yahoo Finance last week about the chain's expectations to raise prices stemming from tariff pressures.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
Home Depot set to report its latest quarterly earnings before the bell on Tuesday. Yahoo! Finance's Brooke Palmer here with what to expect from the home improvement retailer. So what do we got?
Well, Wall Street expects it's going to be a slow start to the year for Home Depot, most certainly, and that's really as two key points really weigh on consumers. That uncertainty around tariffs, and also those elevated home prices, elevated mortgage rates have really continued to create challenges around the housing market, and that's expected to have weighed on Home Depot's first quarter, certainly as potential buyers were spooked off by those higher prices. If we take a closer look at what Wall Street expects here, they still do expect revenue to grow year-over-year roughly 8% to $39.29 billion. Adjusted earnings are expected to decline year-over-year to $3.59. Now, one key area here that all Wall Street has watching is that same-store sales growth number. For eight straight quarters, we saw negative sales growth for Home Depot, and in the Q4, that number turned around. Now, more bad news is expected on the same-store sales growth front. Wall Street does expect that it did fall during this quarter down 0.2%, but experts tell me that Home Depot should be a key winner in the long term here. They say that they have this pro business that makes up about half of their customer base. We know that they recently acquired SRS distribution, that's professional business segment for roughly $18.25 billion last summer. So Wall Street optimistic that that pro business will certainly turn the tide here.
And what does Walmart's recent warning, what does that mean for Home Depot, potentially?
Right, well, two key things here is that they warned that tariffs would create higher prices. Some experts telling me that they that may have opened up the floodgates here in order for others to say, we too have to raise prices because of tariffs. In addition to that, we also know that Walmart loves to tout that they make a majority of their goods here in the U.S. Home Depot, a similar notion. They said a majority of their goods that we sell are produced in the U.S. Both Walmart and Home Depot, they both have some exposure to China here. And so really, you sort of relating those two. They might have to raise higher prices. We also know that Walmart reiterated their guidance. Could we hear similar for not just from Home Depot, but Lowe's reporting the following day and, of course, Target after that. And so Walmart perhaps might have set a precedent here on what these next earnings will look like.
All right, we'll wait and see. Brooke, thank you. Appreciate it.
