• CNBC's Jim Cramer told investors to stick with Home Depot, even though its most recent quarter lacked luster.
• "Sure, the quarter wasn't great, but the conference call commentary I found encouraging, which is why I'm willing to be patient and hold on to Home Depot," he said.

CNBC's Jim Cramer told investors to hold on to stock of home improvement retailer Home Depot, even though its most recent quarter lacked luster.

"Sure, the quarter wasn't great, but the conference call commentary I found encouraging, which is why I'm willing to be patient and hold on to Home Depot," he said. "Remember, you can't wait for the actual turn, you have to get in ahead of time or you'll miss the move."

Home Depot on Tuesday said quarterly sales declined nearly 3% year over year, but it surpassed Wall Street's earnings and revenue expectations despite the cooler demand.

On a call with CNBC, Home Depot Chief Financial Officer Richard McPhail said falling lumber prices and interest rate hikes hurt business, but the company now sees an opportunity to return to growth.

Cramer called management's outlook "appropriately conservative," saying the company is optimistic, but not yet ready to declare a decisive turnaround.

He was encouraged by commentary during Home Depot's conference call, especially CEO Ted Decker's candid remarks about the company's inventory issues. Decker said Home Depot started 2023 with more inventory than he'd like, but after a year progress, he feels "very good about our inventory position" going into 2024. Now that inventory is under control, the company is poised for better future, Cramer said.

Although the Federal Reserve might not make as many rate cuts as Wall Street had hoped, Cramer said he think rates will still ultimately head lower, and that's positive for companies related to housing.

"Home Depot's got a nice catalyst coming in the form of the spring planting season, which is like Christmas for any retailer with a gardening business," he said. "Besides, I'm betting that management deliberately gave a conservative forecast—they like to under promise and over deliver at Home Depot."

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