On the surface, having a store like home improvement giant Home Depot (HD) close for Thanksgiving seems like a universally good move. It allows the staff to spend time with family and friends on a major American holiday, and also fires up interest ahead of the Black Friday sales to follow. But some are concerned that Home Depot’s closure might hurt sales. Investors, though, are not even somewhat concerned, and sent Home Depot shares up modestly in Wednesday morning’s trading.
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There are plenty of reasons for Home Depot to close on Thanksgiving Day. The obvious, of course, is optics; having employees work on a major national holiday is a bad look. But beyond that, it would be a generally slower day as well. Most people are, again, home with their families and their friends, not out shopping for bathroom fixtures or what have you. So being open that day would not only have the normal slate of costs—utilities, payroll and so on—but would have little to recoup the loss.
But some believe that Home Depot may be leaving money on the table by closing on Thanksgiving. After all, for most, Thanksgiving weekend is generally a four-day weekend, something that only occasionally happens in the wild. Typically, people look to maximize their weekend, which is why Home Depot is open early and closes late on weekends, generally. The logic is sound, but the benefits of closure here outweigh the potential drawbacks.
Just Free Tools Outright, Now
One other big reason for closing on Thanksgiving is so that everyone can get properly fired up for Black Friday, which immediately follows Thanksgiving. And Home Depot has plenty of deals lined up for the event, including tool giveaways outright.
Yes, there are free tools to be had, but—and this will likely surprise no one—you will have to buy a tool first. Still, buy-one-get-one-free deals will be all over Home Depot this year, from names ranging from Ryobi (RYBIF) to Dewalt. Drill drivers, impact wrenches and more will all be on hand, allowing shoppers to readily fill loved ones’ toolboxes this Christmas or Hanukkah, depending.
Is Home Depot a Good Long-Term Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on HD stock based on 18 Buys, five Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 17.82% loss in its share price over the past year, the average HD price target of $409.91 per share implies 15.31% upside potential.
