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Home Depot (HD) to Boost Pro Experience With New Credit Scheme

The Home Depot Inc. HD goes another step forward to enhance the experience of its Pro customers, who have been its key growth drivers. The company has decided to augment the commercial credit offerings for Pro customers and their businesses through the launch of The Pro Xtra Credit Card.

The new card will feature a revised Commercial Revolving Charge and have some updates to its Commercial Account Card. The credit options will be powered by Citi Retail Services, one of North America's largest and most experienced retail credit solution providers.

With the expanded commercial credit program, the company expects to assist its Pro customers in saving both time and money. The Pro Xtra Credit Card will have the option to be linked to the Pro Xtra loyalty program so that registered customers can earn Pro Xtra Perks four times faster on card purchases.

The company’s Pro Xtra loyalty program provides member-only benefits, including volume pricing, exclusive product offers, paint rewards, and perks. The company will reward Pro Xtra members with a $100 credit on registering for the new Pro Xtra Credit Card.

What’s More?

Home Depot's Pro segment has been witnessing robust sales growth for the past several quarters. Pro sales growth outpaced DIY sales in the fiscal third quarter. Growth in the Pro segment reflects significant demand for larger projects in the home improvement industry. In the quarter, the company witnessed strength in several Pro-heavy categories like drywall, pipe and fittings, and several millwork categories. The company expects continued sales growth from Pros as project demand is strong and their backlogs are growing.

The company remains on track with its strategic investments to build a Pro ecosystem, including professional-grade products, exclusive brands, enhanced delivery, credit, digital capabilities, field sales support and HD rental. The company expects its differentiated Pro ecosystem to aid deeper engagement with Pro customers in the long term.

Overall, Home Depot has been displaying a remarkable upside story and is well-positioned for long-term growth, owing to solid demand for home improvement projects, the robust housing market and ongoing investments. The company is gaining from growth in the Pro and DIY customer categories as well as digital momentum. Its interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic for the past few quarters, aiding digital sales.

Driven by these factors, the company has retained a robust surprise trend. It reported sales and earnings beat for the sixth straight quarter in third-quarter fiscal 2021. The top and bottom lines also improved year over year. Net sales were up 9.8%, while earnings per share improved 23.3% year over year. Its overall comps grew 6.1%, with a 5.5% improvement in the United States.

The Zacks Rank #1 (Strong Buy) company has a market capitalization of $404.6 billion. In the past year, HD has rallied 41.1% compared with the industry's growth of 39.8%. It also compares favorably with the Retail-Wholesale sector's decline of 12.3% and the S&P 500's growth of 23.4%.

 

Image Source: Zacks Investment Research

 

Other Stocks to Watch

We have highlighted some other top-ranked stocks from the broader Retail-Wholesale space, namely Builders FirstSource BLDR, GMS Inc. GMS and Lowe's Companies LOW.

Builders FirstSource currently sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 71.5%, on average. Shares of BLDR have surged 108.6% in the past year.

You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Builders FirstSource's current financial-year sales suggests growth of 129.1% and that for earnings per share reflects growth of 207.6% from the year-ago period's reported figure.

GMS, a Zacks Rank #1 stock, has a trailing four-quarter earnings surprise of 24.9%, on average. The GMS stock has gained 66.5% in a year.

The Zacks Consensus Estimate for GMS’ current financial-year sales and earnings per share suggests growth of 36.8% and 100.6%, respectively, from the year-ago period's reported numbers.

Lowe's currently flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 14.3%, on average. Shares of the company have gained 46.9% in the past year.

The Zacks Consensus Estimate for Lowe's current financial-year sales and earnings per share suggests growth of 6.8% and 34.8%, respectively, from the year-ago period. LOW has an expected long-term earnings growth rate of 13.7%.


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Lowe's Companies, Inc. (LOW): Free Stock Analysis Report
 
The Home Depot, Inc. (HD): Free Stock Analysis Report
 
Builders FirstSource, Inc. (BLDR): Free Stock Analysis Report
 
GMS Inc. (GMS): Free Stock Analysis Report
 
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