From Nasdaq: 2024-11-08 17:52:00

Home Depot (HD) is set to start the Q3 earnings season for traditional retailers, reporting on Tuesday, November 12th. Lowe’s (LOW) follows on November 19th. Lowe’s shares have outperformed Home Depot this year but both lag the Zacks Construction sector and S&P 500 index.

The operating environment for Home Depot and Lowe’s remains challenging due to unfavorable interest rates. The bond market’s outlook is influenced by the U.S. elections and the incoming administration’s policy stance. Despite Fed easing, treasury yields are expected to remain relatively steady.

Home Depot’s Q3 results are not expected to have major surprises, with earnings projected to be down 5% from last year on higher revenues. The Retail sector’s Q3 earnings show a mix of results, with online vendors and restaurant players reporting varying performances.

Online players and restaurants struggled to beat Q3 estimates, with Amazon showing strong results. The retail landscape is evolving with digital and brick-and-mortar spaces merging. Walmart’s digital business growth is notable, highlighting the impact of Covid lockdowns on the industry.

Earnings growth in the Retail sector is primarily driven by Amazon, while the rest of the group saw a decline in Q3 earnings. Total S&P 500 earnings are expected to be up 7.4% for Q3, with the Energy and Tech sectors impacting growth rates.

The Q3 earnings season has seen moderate growth and fewer companies beating estimates. Q4 earnings are projected to increase, with estimates holding up better than previous quarters. The overall earnings picture shows steady growth with the expectation of double-digit gains in the coming years.



Read more at Nasdaq:: Retail Earnings Loom: A Closer Look