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Home Depot on Tuesday missed Wall Street’s expectations for sales as Americans reined in spending on big projects and focused on smaller-scale home repairs.
The U.S.’s largest home improvement retailer reported $36.4 billion in revenue for its three-month quarter that ended April 28, below the $36.66 billion expected by analysts. On the other side, earnings per share narrowly outperformed, at $3.63 per share compared to the expected $3.60 per share.
Higher inflation and borrowing costs have held back customers from spending on expensive renovations and unnecessary larger purchases. In November, the company’s chief financial office told CNBC that consumers are often choosing to scale down their bigger projects.
“[W]hile the quarter was impacted by a delayed start to spring and continued softness in certain larger discretionary projects, we feel great about our store readiness, our product assortment in stores and online, and our associate engagement,” Home Depot CEO Ted Decker said in a statement.
Customer transactions, or the number of purchases made by consumers at Home Depot retail locations or online, sank 1% to $386.8 million last quarter. That’s a smaller loss than the 4.8% drop recorded by the company during the same time in 2023. The average ticket fell 1.3% to $90.68.
Comparable sales fell for the sixth quarter in a row, dropping 2.8% for Home Depot’s first fiscal quarter of 2024. Analysts had expected a 2.09% drop.
Despite those losses, Home Depot reaffirmed its fiscal year 2024 targets on Tuesday.
The Atlanta-based company expects total sales to climb about 1%, thanks in part due to having an additional week in its fiscal year. That 53rd week will add about $2.3 billion to sales, according to Home Depot. However, excluding that extra week, the retailer said it expects comparable sales to decline about 1%.
Home Depot stock nudged up slightly in pre-market trading Tuesday.