In the retail world, earnings weren’t so good last week. Traditional department store giants Macy’s Inc (NYSE:M), Kohl’s Corporation (NYSE:KSS), Nordstrom, Inc. (NYSE:JWN) and J C Penney Company Inc (NYSE:JCP) all reported disappointing earnings. Every single one of them reported negative comparable same-store sales growth. Consequently, the whole retail sector sold off. Sharply.

Even home building store Home Depot Inc (NYSE:HD) was victim to a slight sell-off, with HD stock falling 1% from mid-week to week-end.

That’s not much, but its completely unwarranted considering Home Depot’s Q1 earnings (due Tuesday before the open) will paint a completely different picture of the consumer.

I think investors should buy the small selloff in HD stock both for a near-term earnings pop and a long-term growth opportunity.

The Consumer Is Shopping At Home Depot

The home-building space is on fire right now. According to the U.S. Census Bureau’s Advance Monthly Sales numbers, building material stores have been the third-fastest growing retail sector so far this year (behind gas stations and non-store retailers). February through April, building material store sales are up 7.1%.

It is worth noting that the same data showed that department store sales have fallen 4.5% in the same time frame. That bearish data lined up pretty well with bad earnings reports from the department store giants. I have confidence that the bullish macro data will line up with a good report from Home Depot.

Moreover, web traffic analytics site SimilarWeb shows that homedepot.com is gaining online traffic share. These traffic share gains are happening globally, domestically and among home and garden sites. Fellow web traffic analytics site Quantcast shows similarly bullish data for homedepot.com traffic over the past several months.

Alphabet Inc’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Trends also shows that interest in HD has continued to rise. So far in 2017, search interest is up around 3% year-over-year. A big part of those gains came in late March and early April, which is often Home Depot’s busiest time of year.

Overall, it looks like the big picture in retail right now is that consumers are shopping … just not at Macy’s, Nordstrom, Kohl’s or JCP. The dollars not being spent at those traditional department stores are being spent at Home Depot. The macroeconomic data shows this, and I think the company’s report will more strongly illustrate this trend.

That makes HD stock a buy into earnings.

HD Stock Has Strong Long-Term Potential

Longer-term, the Home Depot growth story looks equally as strong as the near-term outlook.

Firstly, there is opportunity for HD to significantly grow market share. As has been pointed out by Credit Suisse, Home Depot is a natural winner from continued sales erosion at Sears Holdings Corp (NASDAQ:SHLD). Sears still accounts for 15% to 20% of the Appliance market and 10% to 15% of the U.S. Tool market. But sales at SHLD continue to erode at a fast pace. As SHLD sales continue to fall, HD has a tremendous opportunity to grow appliance and tool market share.

Secondly, it looks like the home building space can continue to remain on fire for another several years. Since 1993, the average year-over-year growth rate for home building store sales is 4.4%. Excluding the huge trough in 2008-09, the average growth rate is 5.7%. The past three months have been running above that at 7.1%, so we might be at a near-term peak. Bigger picture, though, is that a long-term secular growth rate of 5.7% is superb as an industry average.

Click to Enlarge Home Depot is the king of that industry. As the king of an industry with a secular 5.7% year-over-year growth rate, HD stock should be a winner for the long-term.

Bottom Line on HD Stock

HD stock is trading around 24-times trailing earnings, and that is a valuation peak. Whenever HD stock has traded at this rich of multiple in the past (August 2016, April 2016 and December 2015), it pulled back over the next several months.

But earnings weren’t really the catalyst for those downward moves. In retrospect, those pullbacks look like near-term profit taking noise in a long-term upward trend.

That upward trend will most likely continue on Tuesday. I think its a good time to get in before the pop.

As of this writing, Luke Lango was long HD and KSS.