Earnings Preview: The Home Depot

The Home Depot (HD) is expected to report Q3 earnings before the market open on Tuesday, November 17 with a conference call scheduled for 9 am ET.

Guidance

Analysts are looking for a profit of 36c on revenue of $16.27B. The consensus range is 31c-41c for EPS, and revenue of $16.01B-$16.56B, according to First Call. In August, Home Depot forecast FY09 EPS flat to up 7% from FY08, with adjusted EPS down 15%-20%. The company also said it expected FY09 sales to be down approximately 9% from FY08. At September's Goldman Sachs Retailing Conference, CEO Frank Blake said the company sees opportunities for international expansion and noted that the economic recovery will be somewhere between a traditional and a flat line recovery. CFO Carol Tome said the company expects CapEx over the next several years to be $1.2B-$1.5B per year, mainly to reinvest in what it currently owns.

The company recently announced an agreement with Martha Stewart Living Omnimedia (MSO) to develop an exclusive Martha Stewart Living brand of home improvement products in select categories, including Outdoor Living, Home Organization and Home Decor. Home Depot rival Lowe's (LOW) reported in-line Q3 results, and said it's beginning to see signs of improved performance, which may bode well for Home Depot's results.