On Tuesday, Home Depot reported Q4 results that exceeded expectations but did not provide a forecast, saying they could not predict “how consumer spending will develop in 2021.
Video transcription
MYLES ABROAD: Okay, let’s talk fast about Home Depot. Stocks have fallen slightly in pre-market trading. And I think it goes to the theme of what they said they were looking for. The language was that, if the trends for the annual sales of compensations continue during the fiscal year ’21, they will see flat to slightly positive compensations. This comes after a year in which they had 20% year-on-year compensation. What is flat to slightly positive for Home Depot is probably good for you and I get out there to do something other than sit at home. But after such a killer year, it’s not a big surprise that Home Depot does not really want to look for another 20% growth year like in 2020.
BRIAN SOZZO: Reg, Myles. And I think that while you see that the stock may not really be going up that much, or just a little bit under bias of the downward pressure, they did not come out with guidance. They did drop to your point, they dropped the same store sales comment at the bottom of the press release. But the company is getting into some of the earlier analyst notes because they did not come out after a real outburst year and came out with strong guidance. Look especially, Macy’s came out with guidance. And they have been falling into the drain for the past two years. And even the company came out with guidance.
Home Depot should therefore probably have led with some form of sales, operating margin, earnings per share as usual in normal times. Nevertheless very strong quarter. And I think if you’re a trader in this market, it’s the type of quarter for Home Depot, where you lay your thumbs up, do your fundamental research on Whirlpool, do your fundamental research on a Sherman Williams or a Mohawk country largest carpet maker. Because they yield a 25% increase in the same store sales in the US.
This is a profit I have never seen before because of this company. This is a very strong, very strong term. And that would suggest that some form of momentum continued at least in the first quarter of this year. And I suspect Home Depot will talk about it during their earnings call.
MYLES ABROAD: Yes, I mean, for a business of this size, just a ridiculous number to set up. But it’s interesting, the stock’s peak was back in august and you wonder how much that mix of us thinks we’ve reached all our customers, we’ve pulled x forward, and there are things we can not supply our customers. Think of wood. The price of wood went through the roof. Not meant to put it, but anyway, you get the pun there. Anyway, so all things considered, I think maybe where the offer is part of the Home Depot improvement cycle. And we’ll see how it plays out.