Home Depot (HD) is expected to report another quarter of muted earnings as shoppers hold off on major home improvement projects amid high interest rates and tighter wallets.

On Tuesday, the home improvement retailer is expected to report $43.62 billion in revenue, a 1.64% jump year over year, and adjusted earnings per share of $4.53, a 2.61% drop.

Same store sales are expected to decline 2.39%. This would mark the seventh straight quarter of negative sales growth for Home Depot.

With the "noise that interest rates are going to come down," consumers are likely to hold off even more, per UBS analyst Michael Lasser.

"If you're a consumer and you're thinking about financing a big ticket remodel, you're inclined to wait at this point until the financing of that project is gonna become a little bit less expensive," he said. "All of that means the conditions are set for an upturn that's probably going to occur in 2025."

But interest rate cuts, the first of which is expected to come in September, could help with a turnaround.

Joe Feldman of Telsey Advisory Group said investors may have to wait a while to see the effect trickle down to Home Depot. If the Fed lowers rates in September, "it doesn't mean sales pick up the next day," he said.

"There's a little lag in the housing market...six to nine months, 12 months from now, it's going to look good," he told Yahoo Finance over the phone, "That's why the stocks will respond right away, but the fundamentals will take a little time to kind of catch up."

Whirlpool (WHR) CEO Marc Bitzer told Yahoo Finance's Brian Sozzi that it would take several rate cuts to restart momentum in the housing market. The company expects to see improvement in its business in Q3 and Q4.

As Yahoo Finance's Dani Romero reported, mortgage rates dropped to its lowest level since early February after the Federal Reserve set the stage for a September interest rate cut.

Rival Lowe's (LOW), which has a larger DIY customer base, is reporting earnings on August 20 before market open.

As the macro environment remains choppy, investors are optimistic about the pro side of the business. Home Depot's $18.25 billion acquisition of SRS Distribution was completed ahead of schedule on June 18 .

"We believe Home Depot has opportunities with the complex pro, both organically through expanding foundational Pro Ecosystem capabilities to 17 markets by the end of 2024, and inorganically through SRS," Bank of America analyst Robert Ohmes wrote in a note to clients.

Here's what Wall Street is expecting from Home Depot, compared to Q2 of last year:

• Revenue: $43.79 billion compared to $42.92 billion

• Adjusted earnings per share: $4.53 compared to $4.65

• Same-store sales growth: -2.39% compared to -2.00%

• Foot traffic: -1.46% compared to -1.80%

• Average ticket size: -0.73% compared to 0.10%

Last quarter, the company reaffirmed its fiscal 2024 guidance, with a 1% year over year total sales growth and a 1% drop in same-store sales.

Home Depot CFO Richard McPhail said it would "update guidance as appropriate once the SRS transaction closes," following its Q1 results.

With this in mind, Lasser said the company is "most likely going to take a more conservative stance on the outlook for the back half of the year," given the macro challenges facing the home improvement sector.

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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].

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