Will higher Home Depot earnings per share be a recurring trend or a lucky fluke?

home depot earnings

A mixed financial report yesterday from retailer Home Depot had shares rising 4% in pre-market trading this morning.

On one hand, reported earnings of $3.17 per share beat analyst projections of $3.05 per share.

However, overall sales came in at $30.8 billion, less than analysts had expected at $31.02 billion. And same-store sales rose 3% instead of the projected 3.4%.

Leadership cites lumber prices as having a significant impact, with CEO Craig Menear reportedly stating that some of the pressure on Home Depot is caused by “continued lumber price deflation, as well as potential impacts to the U.S. consumer arising from recently announced tariffs.”

Market Activity Holds Steady for HD

In the early market day, Home Depot held onto its gains of around $216 per share. That represents a rise of about $10 per share from prices last Wednesday, and about 5% higher than the stock was a month ago.

Home Depot stock is up over the last six months. It hit a value of around $190 in February and is now currently trading at around $217 per share as of midday.

In fact, the 4% increase puts Home Depot at all-time highs, and positions it competitively with its rivals, like Lowe’s.

What About Tariffs?

For the longer term, though, many point to increased tariff activity as something that could decrease Home Depot’s sales further in the quarters to come. The U.S.-China trade war could have an effect…

A spate of recent tweets shows financial experts looking at how tariffs could affect suppliers and potentially diminish consumer activity at the hardware store’s chain … According to some analysis, it’s not so much that tariffs would be put on Home Depot’s products.

The concern is that tariffs could place a general burden on the consumer — and that could lead to lower sales overall.

However, Menear sounds a positive note: “We are encouraged by the momentum we are seeing from our strategic investments and believe that the current health of the U.S. consumer and a stable housing environment continue to support our business,” Menear said after the release of the financial data, according to The Street.

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