On 14 May, the world’s largest home-improvement retailer Home Depot (HD:NYSE) is set to release its first-quarter earnings.

The firm, which has a market value of over $330 billion and operates more than 2,300 stores in the US, Canada and Mexico, is expected to report EPS (earnings per share) of $3.60 on revenue of $36.65 billion.

While this will be a step up from the previous quarter, it represents a drop in both EPS and sales compared with last year as customers pull in their horns.

Whereas in the past the company enjoyed reliable growth thanks to its industry-leading position, consumers are focusing on essential spending and eschewing big-ticket discretionary items in particular.

In addition, after three years of bumper sales during and after the pandemic, a slowdown in the US housing market due to high mortgage rates has dampened demand for home-related purchases.

Like-for-like sales were down 3.2% in 2023, a year which president and chief executive Ted Decker called ‘one of moderation’, and for 2024 year the company expects organic sales to fall 1% so it has been acquiring other businesses both to boost revenue and fill gaps in its portfolio.

Last December, the company bought Construction Resources, a distributor of design-oriented interior products for professional contractors involved in the RMI (repair, maintenance and improvement) market. 

In March, the firm paid $18.25 billion for SRS Distribution, a company which supplies roofing, landscaping and pool contractors, in the hope it would ‘open up a new customer for us’ according to chief finance officer Richard McPhail.

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