The logo of U.S. home improvement chain Home Depot is seen in Mexico City, Mexico January 15, 2020.
Luis Cortes | Reuters
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.
The home improvement retailer said it expects total sales to grow about 1% in fiscal year 2024, which includes an additional week. That compares with a 1.6% increase expected by Wall Street, according to StreetAccount. Home Depot also anticipates it will open about a dozen new stores during the year.
On a call with CNBC, Chief Financial Officer Richard McPhail said demand for home improvement dipped throughout the year as consumers spent more of their dollars on experiences. He added that falling lumber prices and rising interest rates hurt the business.
Home Depot now sees a chance to return to growth, McPhail said.
“Our market is on its way back to normal demand conditions,” he said. “We’re not quite there yet, but the pressures we saw in 2023 are receding.”
Here’s what the company reported for the three-month period ended Jan. 28 compared with what Wall Street expected, based on a survey of analysts by LSEG, formerly Refinitiv:
- Earnings per share: $2.82 vs. $2.77 expected
- Revenue: $34.79 billion vs. $34.64 billion expected
Home Depot shares fell nearly 2% in premarket trading.
Net income for the fiscal fourth quarter fell to $2.80 billion, or $2.82 per share, from $3.36 billion, or $3.30 per share, a year earlier.
Net sales decreased from $35.83 billion in the year-ago period.
Home Depot has faced a tougher sales backdrop over the past year. The home improvement retailer is following a more than two-year period when Americans had more time and money to spend on painting and fixing up their homes during the pandemic.
The company has also felt a pullback in consumer spending, particularly on big-ticket items, as some families postpone discretionary purchases because of inflation,…
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