A customer loads plywood to a truck outside a Home Depot store in Galveston, Texas, on Tuesday, Aug. 25, 2020.
Scott Dalton | Bloomberg | Getty Images
Home Depot’s revenue fell short of Wall Street’s estimates in its fiscal fourth-quarter earnings report Tuesday.
The company also provided a muted outlook for the next year amid a tough consumer backdrop.
Here’s what the company posted, compared to what Wall Street was anticipating, based on a survey of analysts by Refinitiv:
- Earnings per share: $3.30 vs. $3.28 expected
- Revenue: $35.83 billion vs. $35.97 billion expected
It’s the first time Home Depot missed Wall Street’s revenue expectations since November 2019, before the Covid pandemic. Shares of the company fell 4%.
In the quarter ended Jan. 29, Home Depot reported $35.83 billion in sales, up 0.3% from the year ago period, which saw $35.72 billion in revenue. The retailer’s reported net income of $3.36 billion was also 0.3% higher than the year ago period, which was $3.35 billion, or $3.21 per share.
Amid record levels of inflation, a shift in consumer behavior and a housing market slowdown, the home improvement retailer has repeatedly beat the Street’s expectations over the last year but fell a bit short in sales estimates.
The company attributed that solely to a drop in lumber costs, which had surged in price due to nationwide shortages in fiscal 2021. The drop in lumber negatively impacted comparable sales by 0.7%, the company said.
Home Depot said it expects sales and comparable sales to be approximately flat for the new fiscal year. They project an operating margin rate of about 14.5%, which is impacted by a $1 billion investment Home Depot is making in wage growth.
Home Depot expects a mid-single digit percent decline in diluted earnings-per-share.
The retailer’s CFO, Richard McPhail, told CNBC that Home Depot provided a muted outlook because it expects some pressure in the goods sector and flat consumer spending.
“So we work from kind of a fundamental assumption…
Read the full article here
