The Home Depot released fourth quarter results on Tuesday that beat expectations but did not provide an outlook and said it could not predict “how consumer spending will look” in 2021.
MYLES UDLAND: All right, let’s talk quickly about Home Depot. The stock was down a bit in pre-market trading. And I think that goes to that theme of what – they said they were looking, the language was, if the full year trends for comp sales continue for fiscal 21, they’ll see comps. stable to slightly positive. This comes after a year where they had 20% YoY comps. What’s flat or slightly positive for Home Depot, it’s probably great for you and I to be coming back there to do something other than just stay home. But after such a murderous year, it’s no surprise The Home Depot isn’t really looking for another year of 20% growth like they saw in 2020.
BRIAN SOZZO: Yes, Myles. And I think even though you see the stock maybe not really going up that much or really a little under the pressure of a downward bias, they didn’t come out with any advice. They dropped it, at your point they dropped that same store selling comment at the bottom of the press release. But the company is getting tarnished in some of the early analysts’ notes for not coming out after a truly explosive year and with solid forecasts. Especially look, Macy’s came out with some advice. And they’ve been falling apart for two years. And even this company provided advice.
So Home Depot probably should have offered some form of revenue, operating margin and earnings per share, as they normally would in normal times. Nonetheless, a very solid quarter. And I think if you’re a trader in that market, this is the type of quarter for Home Depot where you step in, do your basic Whirlpool research, do your basic research on a Sherman Williams, or a Mohawk, the largest carpet manufacturer in the country. Because they increased US comparable store sales by 25%.
It is a gain that I had never seen before from this company. It’s a very strong, very strong quarter. And that would suggest that some form of momentum has at least continued into the first quarter of this year. And I suspect Home Depot will be talking about it on their earnings call.
MYLES UDLAND: Yeah, I mean, for a business this size, just a ridiculous comp number to display. But it’s interesting, the stock peak was back in August and you’re wondering how much this mix of, we think we’ve reached all of our customers, we’ve grown x amount of sales compared to what we can not provide. our clients. Think of wood. The price of wood has exploded. I didn’t mean to say that, but somehow you get the pun. Anyway, so all this, I think maybe this is where the supply constraint is part of the Home Depot renovation cycle. And we’ll see how it goes.