Home Depot slides as lack of future profit guidance outweighs earnings beat
- Shares of
Home Depotdeclined by over 6% on Tuesday as the company opted not to provide profit guidance for 2021.
- The company reported
earningsthat grew 16% to $2.65 per share, higher than analysts' expectations.
- Revenue, meanwhile, jumped 25% to $32.26 billion, also higher than the $30.7 billion that analysts expected.
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Shares of Home Depot slipped as much as 6% on Tuesday as the largest home improvement retailer in the country declined to provide profit guidance for 2021, citing the unpredictability of how the coronavirus
The company reported fourth-quarter earnings that topped estimates as demand for home improvement products boomed during the pandemic. However, as the US approaches one year under pandemic conditions, Home Depot acknowledged that future demand would be difficult to predict."As we look ahead to fiscal 2021, while we are not able to predict how consumer spending will evolve, if the demand environment during the back half of fiscal 2020 were to persist through fiscal 2021, it would imply flat to slightly positive comparable sales growth and operating margin of at least 14 percent," said Richard McPhail, executive vice president and CFO, in a statement.
Revenue, meanwhile, jumped 25% to $32.26 billion, also higher than the $30.7 billion that analysts expected.The company's net income rose to $2.86 billion, or $2.65 per share, higher than the $2.48 billion, or $2.28 per share, compared to the same year last year. Analysts surveyed by Refinitiv were looking at $2.62 per share.
Still, even as more people may slowly return to offices this year, improvements in workspaces may boost Home Depot's sales. Almost half of the company's sales come from professionals, which include plumbers and electricians.At the end of the fourth quarter, Home Depot operated 2,296 retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces, and Mexico. The Company employs approximately 500,000 associates. Shares of Home Depot traded at $261.59 at 10:34AM E.T. on Tuesday.
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