Home Depot Is Joining Warren Buffett in Betting on a Housing Surge. Here's Why It's a Brilliant Move.
It's been a rough year for Home Depot (NYSE: HD). The world's largest home improvement chain is managing through a depressed housing market that's impacting almost any business related to real estate. But it's sewing the seeds of recovery. Last week, it announced that it's acquiring a company targeting the pro community. Here's why it's a brilliant move.
In fiscal 2023's fourth quarter (ended Jan. 28), Home Depot's sales fell 2.9% from a year ago and comparable sales fell 3.5%. Earnings per share (EPS) slipped from $3.30 to $2.82. Management is guiding for things to stay about flat in 2024.
There are several headwinds for Home Depot that are all connected to inflation. The real estate market has been under severe pressure due to high interest rates, and fewer people buying homes means fewer people remodeling. On top of that, even shoppers who are buying are holding off on large, expensive purchases right now.
Source Fool.com
