Home Depot reported slower earnings on weaker sales, although it still was able to beat Wall Street analysts’ forecasts.
Consumers aren’t spending on home improvement projects the way they were during the pandemic. But the company said it is still seeing some strength in smaller improvement jobs, which represent a key part of its business.
“We saw continued customer engagement with smaller projects, and experienced pressure in certain big-ticket, discretionary categories,” said CEO Ted Decker.
The company earned $3.8 billion, or $3.81 a share, in the third quarter that ended October 29, down 12% from $4.3 billion a year earlier. Analysts surveyed by Refinitiv had forecast earnings per share of $3.76. Revenue slipped 3% to $37.7 billion, which was slightly better than the forecast of $37.6 billion.
Sales at stores open at least a year fell 3.1% as a slowing in the housing market continued to be a headwind for the company.
Same store sales have been down each of the last three quarters, and on Tuesday the company said it’s looking for a drop of between 3% to 4%, although it narrowed that range from the 2% to 5% drop it had given in its outlook three months ago.
Higher interest rates, especially mortgage rates, have slowed home building. Government data shows that housing starts through the first nine months of this year are down 12%.
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