Earnings Preview: Home Depot

| About: Home Depot, (HD)
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Home Depot (NYSE:HD) is expected to report Q2 earnings before the market open on Tuesday, August 14 with a conference call scheduled for 9:00 am ET.


Analysts are looking for EPS of 97c on revenue of $20.74B. The consensus range is 95c-$1.02 for EPS, and $20.38B-$20.93B for revenue, according to First Call. After reporting better than forecast Q1 EPS, the company forecast FY12 EPS $2.90, consensus $2.92. The company also forecast Q2 comps lower than Q1, which were up 5.8%, due to the pull forward of sales; Home Depot said Q2 comps would be the low point of the year. The company backed its FY12 EPS view at its Investor & Analyst Conference in June, as well as its FY12 sales view of a 4.6% increase, consensus $73.96B; the company's buyback is not expected to have a material impact to FY12 EPS. The company set a long-term operating margin target of about 12% by FY15 and said it looked to achieve an operating profit of 10% and invested capital return of 15% by the end of FY12. The company said it looked to complete its share repurchase during FY13 and would look to increase its authorization at that time. Home Depot forecast "moderate" GDP growth and a "slow" housing recovery. Recently, Home Depot announced plans to buy U.S. HomeSystems (NASDAQ:USHS) for $12.50 per share in cash.

Analyst Views

Janney recently downgraded Home Depot based on valuation, moderating sales trends, the weaker macro backdrop and more difficult comps.