Home Depot Inc (NYSE: HD) not only reported a revenue
miss in its first-quarter
results, but cautioned investors it's seeing a "slow start" to the spring shopping season. CNBC's Jim Cramer
says the sell-off in Home Depot's stock is unwarranted and should be bought.
What Happened
Home Depot reported an earnings beat, but revenue of $24.947 billion fell short of the $25.22 billion analysts were expecting.
The revenue shortfall not only prompted a sell-off in the retailer's stock, but the Dow heavyweight component contributed to a
triple-digit decline in the index.
Home Depot's earnings was impacted by poor weather trends -- often an excuse used by companies to justify a poor quarter. But in
Home Depot's case, management "deserves the benefit of the doubt," Cramer said on Tuesday's "Squawk on the Street."
"Everyone likes to go to Home Depot for the planting season," Cramer said. "And the weather wasn't there."
What's Next
Home Depot's business has a "stickiness" to it, Cramer said. Specifically, if consumers didn't visit their local Home Depot
stores in the first quarter they will likely do so in the second quarter.
Rival Lowe's Companies, Inc. (NYSE: LOW) reports its
first-quarter results May 23. As has been in the case for some time, Home Depot reports better earnings, same-store sales and
growth compared to Lowe's, Cramer said.
"By the time next week when Lowe's reports, we're all going to say to ourselves, 'Shoot, that Home Depot was such an
opportunity,'" Cramer said.
Home Depot's stock traded around $187.76 at time of publication, down 1.8 percent on the day.
Related Links:
Trade
Concerns, Earnings Could Put 8-Day Dow Win Streak in Jeopardy
Mid-Morning
Market Update: Markets Open Lower; Home Depot Sales Miss Estimates
© 2018 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.