Key Takeaways:
- Comparable customer transactions fell 1.3% in fiscal Q1, a fifth straight decline
- Average ticket rose 2.3% to $92.76, offsetting lower traffic
- Q2 results due Tuesday test whether the streak reaches six quarters
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Home Depot transactions fall 5 straight quarters as housing weighs
Home Depot's comparable customer transactions fell 1.3% in fiscal Q1, a fifth straight quarterly decline, even as average ticket rose 2.3% to $92.76.
"The underlying demand in our business was relatively similar to what we saw throughout fiscal 2025, despite greater consumer uncertainty and housing affordability pressure," CEO Ted Decker said in the first-quarter release.
Total sales grew 4.8% year over year to $41.8 billion in the period ended May 3, but total transactions slipped to 391.1 million from 394.8 million. Comparable transactions fell 0.5% in Q1 fiscal 2025, 0.4% in Q2, 1.6% in Q3, 1.6% in Q4, and 1.3% in the latest quarter. Comparable-ticket growth accelerated from flat a year ago to gains of 1.4%, 1.8%, 2.4%, and 2.2% over the following four quarters. The two trends nearly cancel out: comparable sales rose just 0.2%, 0.4%, and 0.6% over the past three quarters, with U.S. comparable sales up 0.4% in the latest period.
The gap between comparable and total sales growth comes from acquisitions. Home Depot bought SRS Distribution, a supplier to professional contractors, in June 2024, and added building-products distributor GMS last year; both are excluded from transaction and ticket figures. Management reaffirmed guidance for total sales growth of 2.5% to 4.5%, comparable sales roughly flat to 2%, and diluted EPS flat to up 4% from last year's $14.23. First-quarter net earnings slipped to $3.30 per diluted share from $3.45 a year earlier.
The company reports fiscal second-quarter results Tuesday, Aug. 18, covering the spring selling season — its biggest sales quarter last year, when sales reached $45.3 billion, up 4.9%. If comparable transactions fall again, the streak reaches six quarters, or a year and a half without transaction growth. Consensus expects EPS of $4.73, versus $4.68 a year earlier.
The stock trades around $339, about 21% below its 52-week high, at roughly 24 times earnings. Home Depot generated about $13 billion of free cash flow last fiscal year, and the dividend is well covered. Rival Lowe's faces the same housing headwinds, with both chains dependent on mortgage rates and home turnover to revive foot traffic.
Home Depot's customers aren't defecting to competitors; they appear to be delaying projects that require a loan or a home sale. A turn in traffic likely needs cheaper borrowing and more homes changing hands — factors outside the company's control. Tuesday's report shows whether the streak breaks or reaches six.
This article is for informational purposes only and does not constitute investment advice.
