Home Depot reaffirms 2023 guidance, several analysts comment

Home Depot (NYSE:) reaffirmed its fiscal 2023 guidance and provided an updated market stability base case outlook ahead of today’s 2023 Investor and Analyst Conference (started at 9 am ET).

2023 sales and comparable sales are expected to decline between 2% and 5% compared to fiscal 2022. Diluted EPS is expected to decline between 7% and 13% year-over-year.

The company expects the overall home improvement market to grow by low-single digits, sales growth to be in the range of 3%-4% per year, and diluted EPS to grow in mid-to-high-single digits.

“While a lot has changed in the environment and our business since our last Investor and Analyst Conference, our objectives to grow market share and deliver exceptional shareholder value remain unchanged, and our culture and values remain our guideposts,” said CEO Ted Decker.

According to DA Davidson analysts, the outlook still calls for a difficult year, but the expected comps decline of 2-5% is no worse than the 4.5% comp decline from Q1/23. This suggests comp trends have bottomed, although the analysts believe the full-year margin reiteration of down 100 to down 130 bps does show continued weakness versus the down 30 bps in Q1/23. The firm reiterated its Neutral rating and $306 price target.

According to Roth/MKM, the sales and earnings growth outlook is achievable, however, in the interim, the depth and duration of near-term sector weakness remain in question. The firm reiterated its Neutral rating and $292 price target.

Last month, the company reported its Q1/23 earnings, with EPS and revenues coming in worse than the consensus estimates.