With 2,361 company stores and first-quarter annualized revenue of $167 billion, Home Depot (HD +1.40%) has a strong position in the home improvement market. But its shares currently trade 28% below their peak (as of June 4), which might prompt investors to want to buy the business.
But you shouldn't consider adding this retail stock to your portfolio until you know this one metric.
Image source: The Motley Fool.
To gauge Home Depot's performance, investors must look at same-store sales, which calculates the year-over-year change in revenue from locations that have been open for at least 52 weeks. It strips away the impact new stores can have on the top line, giving a clean and consistent look at the financials.
During the fiscal 2026 first quarter (ended May 3), same-store sales grew by only 0.6%, as lower traffic was offset by higher ticket sizes. This followed a 0.3% gain in fiscal 2025 and a 1.8% decline in fiscal 2024. These aren't encouraging figures.
NYSE: HD
Key Data Points
Given that it serves the housing market, it's no surprise that Home Depot is dealing with cyclicality amid higher mortgage rates and inflationary pressures. In an uncertain macroeconomic environment, consumers don't feel as confident spending big money on upgrades and renovations.
It's impossible to know when the economic winds will start to blow in Home Depot's favor. But the 3% dividend yield might be enough to entice income investors.
