📝 usncan Note: Previous Earnings Reports Hurt Home Depot Stock—Will This One?
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CANADA – 2025/08/15: In this photo illustration, the Home Depot logo is seen displayed on a smartphone screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
Note: Home Depot FY’24 concluded on February 2, 2025.
Home Depot (NYSE: HD) is set to announce its fiscal second-quarter earnings on Tuesday, August 19, 2025, with analysts anticipating earnings of $4.70 per share on $45.37 billion in revenue. This would indicate a 2% increase in earnings year-over-year and a 5% rise in sales compared to the previous year’s figures of $4.61 per share and $43.18 billion in revenue. Historically, HD stock has dropped 55% of the time after earnings announcements, with a median one-day decline of 2.2% and a maximum observed decrease of 9%. Also see, Buy or Sell Home Depot?
In Q1, Home Depot experienced solid demand for smaller projects and seasonal activities; however, high interest rates deterred many consumers from engaging in large renovation projects. The company is committed to maintaining prices despite tariff pressures, using its scale, supplier relationships, and a diversified supply chain to absorb costs and potentially capture market share as competitors increase their prices. The company has a current market capitalization of $400 Bil. Revenue over the past twelve months was $163 Bil, and it was operationally profitable with $22 Bil in operating profits and net income of $15 Bil. Separately, see Robinhood Stock To $230?
For event-driven traders, historical patterns may provide an advantage, whether by positioning in advance of earnings or responding to movements after the release. That said, if you are looking for upside with less volatility than from individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and delivered returns over 91% since its inception. See earnings reaction history of all stocks.
Home Depot’s Historical Odds of Positive Post-Earnings Return
Some insights on one-day (1D) post-earnings returns:
- There are 20 earnings data points recorded over the past five years, with 9 positive and 11 negative one-day (1D) returns observed. In total, positive 1D returns occurred approximately 45% of the time.
- Notably, this percentage rises to 58% if we consider data from the last 3 years instead of 5.
- Median of the 9 positive returns = 1.7%, and median of the 11 negative returns = -2.2%
Additional data for observed 5-Day (5D) and 21-Day (21D) returns following earnings are summarized along with the statistics in the table below.
HD Correlation Between 1D, 5D, and 21D Forward Returns
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Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky approach (although not effective if the correlation is low) is to assess the correlation between short-term and medium-term returns after earnings, identify the pair that exhibits the highest correlation, and execute the appropriate trade. For instance, if 1D and 5D show the greatest correlation, a trader can position themselves “long” for the following 5 days if the 1D post-earnings return is positive. Here is some correlation information based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the relationship between 1D post-earnings returns and subsequent 5D returns.
HD Correlation Between 1D, 5D and 21D Historical Returns
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Is There Any Correlation With Peer Earnings?
Occasionally, peer performance can impact post-earnings stock reaction. In fact, the pricing-in might commence before the earnings are made public. Here is some historical data regarding the past post-earnings performance of Home Depot stock in comparison with the stock performance of peers that reported earnings just prior to Home Depot. For a fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.
HD Correlation with Peers
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