Home Depot Exceeds Expectations, Announces $15B Share Buyback Program

Home Depot Inc.’s stock (HD) rose 0.9% in premarket trade on Tuesday following the company’s second-quarter earnings report. Despite a decrease in net income and sales compared to the year-earlier period, Home Depot exceeded expectations and announced a $15 billion share buyback program.

Financial Results

For the quarter, Home Depot reported a net income of $4.659 billion, or $4.65 per share, a slight decline from $5.173 billion, or $5.05 per share, in the previous year. Sales fell to $42.916 billion from $43.792 billion.

Beating Expectations

Despite the decline in sales, Home Depot’s same-store sales only fell by 2%, surpassing the expected decline of 4.5% according to FactSet consensus. CEO Ted Decker noted that while certain big-ticket, discretionary categories faced continued pressure, there was strength in smaller project-related categories.

Positive Outlook

Despite the challenges posed by the ongoing pandemic, Home Depot remains optimistic about the medium-to-long term outlook for the home improvement industry and its ability to gain market share in a large and fragmented market.

Full-Year Guidance

Home Depot maintained its full-year guidance, projecting a decline in sales of 2%, a 5% decline in same-store sales, and a decrease in EPS of 7% to 13%.

Share Buyback Program

In addition to its quarterly earnings results, Home Depot announced a share buyback program worth $15 billion.

Home Depot’s stock has gained 4.5% year-to-date, while the S&P 500 has seen a 17% increase.

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