Home Depot, the popular home-improvement retailer, has surpassed Wall Street’s expectations for earnings. However, the company predicts a decline in store sales of about 1% in its fiscal year 2024. Despite this news, shares of Home Depot remained unchanged. The unexpected report has caught the attention of financial expert Jim Cramer, who expressed surprise at the decline in sales. He believed that the professional repair and remodel business would have boosted store sales more significantly.
In contrast to Home Depot’s news, Walmart, the largest retailer in the United States, reported a strong holiday quarter with a 6% increase in sales for the three months ending on January 31st. Furthermore, Walmart’s full-year sales guidance fell within the range of analyst expectations. Jim Cramer is set to interview Walmart CEO Doug McMillon on CNBC’s “Mad Money” later today. Cramer commended Walmart as an “inflation fighter,” highlighting the company’s ability to navigate economic challenges successfully.
Roku, a leading smart TV maker and streaming service provider, experienced a nearly 6% drop in shares following Walmart’s announcement of its acquisition of TV maker Vizio for $2.3 billion. Cramer noted that Walmart stated the deal would slightly dilute near-term earnings per share, which surprised him as he expected it to be additive. This development has raised questions about the impact of the acquisition on Roku’s market position and future growth.
On a positive note, Intel, the California-based chipmaker, saw its shares rise by over 1% amidst reports that it could receive more than $10 billion in U.S. government subsidies tied to the 2022 Chips and Science Act. However, Cramer expressed skepticism about Intel’s ability to catch up with its competitor AMD, stating that even with substantial subsidies, Intel remains significantly behind.
In other news, Capital One, a prominent credit card company, recently announced an all-stock deal valued at $35.3 billion to acquire its credit card rival, Discover Financial Services. Cramer believes that within Discover lies an unrivaled payments system that Capital One CEO Richard Fairbank can leverage to their advantage. He reiterated his recommendation to buy Capital One stock despite any temporary weakness in the market.
Overall, the financial landscape is experiencing a mix of positive and negative developments. While Home Depot exceeded earnings expectations, the projected decline in store sales raises concerns. Walmart’s strong holiday quarter performance showcases its resilience as an “inflation fighter.” Roku’s shares took a hit following Walmart’s acquisition announcement, and Intel’s potential government subsidies may not be enough to bridge the gap with AMD. On the other hand, Capital One’s strategic acquisition of Discover Financial Services presents an opportunity for growth in the credit card industry.
