May is a big month for Home Depot (HD -0.74%). Customer traffic tends to rise along with temperatures around the country as shoppers spend energetically on home improvement products. This springtime-demand spike drives the chain's highest sales-volume weeks of the year.

Investors also get a critical update during this period. Home Depot's fiscal first-quarter report arrives just at the start of the spring-demand spike. Let's look at expectations around that upcoming announcement, set for May 16, and where the chain appears to be headed over the next few years.

Big concerns

Worries that a recession will drive a sharp slowdown in the housing market have eased in recent weeks, but there are still some big shareholder concerns heading into the report. Home Depot's 2022 sales growth was pressured by declining customer traffic, for one, which was down 5% for the year.

Sure, that result outperformed home improvement peer Lowe's Companies, which endured a nearly 8% traffic drop for the year. But investors are hoping to see stabilization here and an improvement over Q4's 6% traffic drop.

Home Depot executives said in late February that sales this year are likely to be roughly flat compared to last year's 3% uptick. The mid-May update to that forecast will play a big role in the stock's short-term returns .

Growth avenues

Home Depot isn't expanding its store base, but the chain still has its eyes on a few major growth opportunities in the coming years. These include its massive online business as well as its growing presence in the professional contractor niche. Wins in both areas have helped the retailer win more market share lately. They've also protected profitability in a way that points to increasing investor returns ahead.

The retailer's operating profit margin is close to 15% of sales, after all, compared to Lowe's 12% rate. Maintaining its leadership position on this metric should allow the chain to keep investing in its growth initiatives while delivering more cash to shareholders through dividends and stock buybacks. Look for key updates on those capital return plans in the first-quarter update.

Is the stock a buy?

The stock's path in early 2023 suggests that Wall Street isn't optimistic about the next few quarters. A second year of falling customer traffic and near-zero sales growth would likely pressure earnings, and there's still the potential for a recession to develop in the months ahead.

Yet, Home Depot has thrived through many previous cyclical downturns in the home improvement industry. These are a natural part of the retailing industry, occurring every few years on average. Investors have no way of knowing the timing or scope of these downturns.

But Home Depot's stock returns over the next few years will ultimately be driven by operating metrics like market share and operating profit margin. The retailer stood out against peers in these areas in 2022 and is likely to post a similarly strong result this year. That's why investors should consider keeping Home Depot stock on their watchlists even as the home improvement industry slows.