Home Depot's Slowing Earnings Growth Raises Concerns About Leverage
Home Depot's (HD) earnings growth has been slowing down, and its share count is increasing. The company's diluted share count rose from 993 million to 996 million over the last eight quarters, after a four-year decline.
The increase in shares outstanding is partly due to stock compensation adding to the count, as repurchases are paused. Home Depot's net debt has risen year-over-year, standing at $61.10 billion as of the latest quarter. Leverage on that comparable quarter increased from 1.82x to 1.94x.
The company's return on invested capital (ROIC) has been below its year-ago period in each of the last four quarters, and management's own measure was 24.8% last quarter against 27.2%. The company's returns moved the same way as its net debt and leverage.