Home Depot reported a 3% decline in quarterly sales from a year ago but still managed to top Wall Street’s expectations. The retailer is cautiously looking towards the future, narrowing its full-year outlook with new expectations of a 3% to 4% sales drop compared to the previous 2% to 5% decline. Earnings per share are also expected to slide by 9% to 11% rather than the previous 7% to 13% drop.
Chief Financial Officer Richard McPhail explained in an interview with CNBC that the company’s results and forecast reflect a period of moderation in home improvement. Customers are opting for more modest projects and home repairs, resulting in a downscaling of projects.
For the fiscal third quarter, Home Depot reported earnings per share of $3.81, higher than the anticipated $3.76, and revenue of $37.71 billion, exceeding the expected $37.6 billion. Despite the decline in net income and revenue from the year-ago period, comparable sales declined 3.1% – less than the 3.6% analysts expected.
Over the past year, Home Depot has struggled as a result of high mortgage rates and inflation, causing customers to pull back on pricier projects and big-ticket items. Additionally, the housing market has had a mixed effect on the company’s sales, with customers not moving as much due to high mortgage rates.
Despite these challenges, McPhail noted that Home Depot’s customers are in good financial shape. The company’s stock performance has lagged, with shares falling nearly 9% this year while the S&P 500 gained almost 15% during the same period.
Overall, Home Depot’s caution about the future is driven by evolving consumer priorities and a challenging economic landscape.
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