Home Depot reports fourth-quarter 2018 earnings

Patrick T. Fallon | Bloomberg | Getty Images

A customer browses products at a Home Depot Inc. store in Torrance, California.

Home Depot is set to report earnings before the bell on Tuesday.

Here’s what analysts are expecting for Home Depot’s fourth quarter, based on Refinitiv data:

• Earnings per share, adjusted: $2.16
• Revenue: $26.57 billion
• Same-store sales: up 4.6 percent

For much of last year, confidence in the U.S. housing market soared, benefiting Home Depot and rival Lowe’s. But with mortgage rates climbing, attitudes have since started to turn sour. This may lead to home prices rising at a slower rate and the market cooling down. Analysts are watching to see how this could impact the home improvement retailers in 2019.

Home Depot, meanwhile, has been spending aggressively to bulk up its e-commerce business and narrow the delivery window, or time it takes to get shipments to customers’ homes. In July of last year, it said it plans to spend $1.2 billion over the next five years on its supply chain.

A year ago, Home Depot benefited during the fourth quarter from selling more appliances. As Sears’ store base continues to shrink, and with J.C. Penney pulling out of the appliance category, Home Depot is expected to continue to take a larger share of that market. But that also means Home Depot faces a tough comparison this fourth quarter compared with 2017.

“Home Depot and Lowe’s face tough year-over-year comparisons in the fourth quarter that included hurricane-related sales and a strong year ago December that was negatively impacted by weather in 2018,” Wells Fargo analyst Zachary Fadem said in a note to clients ahead of Tuesday’s report.

“The housing market remains delicate,” he added.

Home Depot shares are up nearly percent so far this year, bringing its market cap to roughly $214.6 billion. That’s compared with Lowe’s, which has a market cap of about $85.3 billion and has watched its shares rise roughly 15 percent this year.

This is a developing story. Please check back for updates.