Home Depot ($HD) is scheduled to release earnings before Tuesday's open (Feb 21, 2017). Home Depot just hit a record high of $142.99/share on Thursday (2.16.17). The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:
Earnings Preview:
Home Depot is expected to report earnings of $1.33/share on $21.73 billion in revenue. Meanwhile, the so-called Whisper number is $1.34. The Whisper number is the Street's unofficial view on earnings.
Company Profile & Various Businesses:
Here is a complete company profile and description of the various businesses courtesy of my friends at Thomson Reuters Eikon:
The Home Depot, Inc. (The Home Depot), incorporated on June 29, 1978, is a home improvement retailer. The Company sells an assortment of building materials, home improvement products, and lawn and garden products, and provides various services. The Home Depot stores average approximately 104,000 square feet of enclosed space, with over 24,000 additional square feet of outside garden area. The Home Depot stores serve three primary customer groups: do-it-yourself (DIY) customers, do-it-for-me (DIFM) customers and professional customers. The Company has approximately 2,270 stores located throughout the United States, including the Commonwealth of Puerto Rico and the territories of the United States Virgin Islands and Guam, Canada and Mexico.
The Company's DIY customers are home owners who purchase products and complete their own projects and installations. The Company assists these customers with specific product and installation questions both in its stores and through online resources and other media designed to provide product and project knowledge. The Company also offers a range of clinics and workshops to impart project knowledge. DIFM customers are home owners who purchase materials themselves and hire third parties to complete the project or installation. The Home Depot's stores offer a range of installation services targeted at DIFM customers who select and purchase products and installation of those products from it in the store online or in their homes through in-home consultations. Its installation programs include categories, such as roofing, siding, windows, cabinet refacing, furnaces and central air systems. Professional Customers are primarily professional renovators/remodelers, general contractors, repairmen, installers, small business owners and tradesmen. The Company offers a range of special programs to these customers, including delivery and will-call services, staff and credit programs.
The Company provides its professional, DIY and DIFM customers to finance their projects by offering private label credit products in its stores through third-party credit providers. The Company offers a range of brands across a range of departments, such as Husky hand tools and tool storage; Everbilt hardware and fasteners; Hampton Bay lighting, ceiling fans and patio furniture; Vigoro lawn care products; RIDGID and Ryobi power tools; Glacier Bay bath fixtures; HDX storage and cleaning products, and Home Decorators Collection furniture and home decor. It offers a range of products to its customers, which include EGO 58-volt cordless outdoor power tools (string trimmer, hedge trimmer, blower, chainsaw and lawn mower); the Husky 100 platform of mechanics tools; LifeProof Carpet; Milwaukee Cobalt Red Helix drill bits, and Feit Electric HomeBrite Bluetooth Smart LED light bulbs.
Through the Company's Eco Options program, it has created product categories that allow consumers to identify products that meet specifications for energy efficiency, water conservation, healthy home, clean air and sustainable forestry. Its Eco Options Program includes over 10,000 products. Through this program, it sells ENERGY STAR certified appliances, light-emitting diode (LED) light bulbs, tankless water heaters and other products. The Company helps its customers save water through sale of WaterSense-labeled bath faucets, showerheads, aerators, toilets and irrigation controllers. The Company also maintains an in-store rechargeable battery recycling program. The Company has recycle over 680,000 pounds of compact fluorescent lamp (CFL) bulbs and over 930,000 pounds of rechargeable batteries collected from its customers. It also recycled over 170,000 lead acid batteries collected from its customers under its lead acid battery exchange program, as well as approximately 200,000 tons of cardboard through a cardboard recycling program across its United States stores.
Competition:
The Company competes Lowe's Companies, Inc., Kingfisher plc, Williams-Sonoma, Inc., Lumber Liquidators Holdings Inc, and other home improvement stores.
Pay Attention To How The Stock Reacts To The News:
From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.
