Home Depot Beats on Both Top and Bottom Lines

Home Depot (NYSE: HD  ) reported earnings on Feb. 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Feb. 3 (Q4), Home Depot beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue increased. GAAP earnings per share grew significantly.

Gross margins contracted, operating margins grew, net margins grew.

Revenue details
Home Depot reported revenue of $18.25 billion. The 23 analysts polled by S&P Capital IQ foresaw sales of $17.69 billion on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $16.01 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.68. The 26 earnings estimates compiled by S&P Capital IQ anticipated $0.64 per share. GAAP EPS of $0.68 for Q4 were 36% higher than the prior-year quarter's $0.50 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 34.9%, 10 basis points worse than the prior-year quarter. Operating margin was 9.6%, 150 basis points better than the prior-year quarter. Net margin was 5.6%, 80 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $18.50 billion. On the bottom line, the average EPS estimate is $0.76.

Next year's average estimate for revenue is $76.30 billion. The average EPS estimate is $3.47.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 3,427 members out of 4,361 rating the stock outperform, and 934 members rating it underperform. Among 1,151 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,008 give Home Depot a green thumbs-up, and 143 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Home Depot is outperform, with an average price target of $67.36.

Is Home Depot the right retailer for your portfolio? Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks," including one above-average retailing powerhouse. Click here for instant access to this free report.

• Add Home Depot to My Watchlist.