Fast Money Blog- 11/15/24

This past week on Wall Street we received important economic news and the Q3 2024 earnings release for The Home Depot, Inc. (HD), a Wealthy Investor favorite stock. 

The annual inflation rate in the U.S. rose to 2.6% in October 2024, up from 2.4% in September. This is not that unusual to see as we move into the 4th quarter, where consumer spending usually increases.

Home Depot’s Q3 2024 earnings showed that although still cautious, shoppers are slowly increasing their home improvement spending. 

Q3 top-line revenue totaled $40.2 billion, up 6.6% year-over-year. Home Depot benefited from sales related to hurricanes Helene and Milton, plus the demand for outdoor items due to warmer and dryer weather across the country. 

In Q3, shoppers visited Home Depot’s stores and shopped online about as much as they did the same quarter a year ago. 

Global comparable store sales fell 1.3% from the same period a year ago. This marked the eighth consecutive quarter of negative comparable sales at Home Depot.

Tyrone, what’s the difference between comparable sales and revenue sales? How can comparable sales decline but total revenue increase?

Comparable store sales, also known as same-store sales, are a metric that compares a company's revenue from their existing stores to a previous period.

Revenue sales, or total sales, include revenue from all stores, including new stores.  

So basically this means that in Q3 Home Depot generated most of its revenue from the opening of new stores to maintain its growth.

Looking ahead, Home Depot projects stronger sales in the near future, with the Feds recent second consecutive interest rate cuts making shoppers more likely to take out loans for remodeling projects. Of course, this remains to be seen. 

In addition, Home Depot hopes its recent asquission of SRS Distribution, which sells and distributes landscaping, roofing and pool supplies, will bring in more revenue. 

In my opinion Home Depot continues to be a flourishing enterprise, great long-term investment and a high dividend paying stock. 

Stay tuned! I expect all Wealthy Investor stocks to advance significantly in the next 52 weeks. 

Tyrone Jackson, The Wealthy Investor