Some flaws in inner annual projections from this leading U.S. store chain for home comfort are too obvious, so that we cannot dismiss them as if weak points were just tiny details. Meanwhile, the positive side was that net sales in the Christmas quarter grew by 14% vs the three-month period one year ago to reach $39.70 billion. The great number also beat the analyst pool's estimates, which recently came out at $39.13 billion on average. The Home Depot's profit of $3.13 per share was also higher than the $3.04 seen by the same Wall Street forecast. This helped the stock to initially spike by 4.85% soon after the opening bell on February 25, from $382.5 to nearly $401 per share. However, less than 60% of this growth remained before the day's close at $393.3.

Another quick bounce back from the $375 major support area has made a proper impression, as it was the third successful attempt to do so since November. However, the further technical retracement in combination with the lack of solid fundamental guidance left things wide open for the nearest future. It is worth adding that the Q4 metrics of equity per share was 11% more than in the same quarter of 2023, but more than 5% weaker than the Q4 results in 2022. Signs of the wavering demand and possible impact from new import tariffs for materials may fade the upside momentum, so that the price range for the Home Depot may rather shift to the extended corridor between $350 and $440 at best, taking this peaking price of December 2024 into consideration.

More details are essential. The three-month period, which ended on February 2, actually consisted of 14 weeks versus 13 in the previous year, Home Depot officials commented, saying that it automatically provided a "roughly $2.5 billion" of extra sales. On a post-earnings conference call, Home Depot chief financial officer Richard McPhail noted they continue to see consumers' behaviour as being "very healthy", sharing his view that "we will grow our market share in any environment", while "we have likely reached the bottom of housing turnover", yet also adding that "we are neither expecting a big rebound, nor significant increases in new housing starts". Citing a cautious mood without a bulky or an immediate effect from the Federal Reserve's borrowing cost reductions, the Home Depot estimated its comparable sales for the next 52 week to grow by only 1% against Bloomberg analyst poll's higher consensus estimates of 1.65%, with a projected decline in adjusted diluted equity per share by approximately 2%.

Meanwhile, comparable sales for the last quarter, which the company CEOs said did not include the additional week, grew by 0.8%. The same pool of analysts anticipated a decline of 1.71%, so that the positive difference became a possible driver for the initial price spike this week. Again, the company increased its quarterly dividend by 2.2% to $2.30 per share after generating a solid free cash flow of $16.6 billion over the last year. The main question here is would the markets be able to transform this short-term momentum into mid-term trend. The Home Depot's rival Lowe's (LOW) which just reported its sales results on February 26, initially gained by more than 2.5% on slightly better than expected quarterly numbers but failed to maintain the initial rise in its share price as well. Market saturation may restrict further growth potential in the segment.