Sector: Consumer Discretionary | Focus: Home Improvement Retail
HQ: Atlanta, Georgia
Financial Risks
The Home Depot faces market risks from fluctuating interest rates, foreign currency exchange rates, and commodity prices. A negative comparable sales environment, including lower average ticket and customer transactions, is a concern. Higher long-term debt and increased equity from the SRS acquisition could impact return on invested capital (ROIC). The company's ongoing business transformation initiative may also present internal control risks. Preliminary valuations of acquired assets and liabilities are subject to adjustments.
Financial Upside
The Home Depot's net sales increased in Q3 2024, driven by the SRS acquisition. Online sales are growing. The company has a $15 billion share repurchase authorization, though currently paused. The company anticipates continued investment in the business, including new stores and technology. The Home Depot's ROIC was 31.5% in the trailing twelve months.
