Home Depot HD posted better-than-expected fiscal-third-quarter earnings Tuesday, while narrowing its full-year profit forecast, amid what the home-improvement retailer described as consumers pulling back higher-priced items and projects.
Home Depot said earnings for the three months ending in October were pegged at $3.81 a share, down 10.1% from the same period last year and 5 cents ahead of the Wall Street consensus forecast. Group revenue fell 3% from last year to $37.71 billion, narrowly ahead of analysts' estimates of a $37.61 billion tally.
Same-store sales were down 3.1% from last year, just above Wall Street forecasts of a 3.3% decline, while comparable sales in the U.S. were down 3.5%. Average purchases slipped 0.3% per trip to $89.36, while the number of individual transactions slowed by around 2.4%.
Big-ticket sales, defined as those of more than $1,000, were down 5.2% from a year earlier, Home Depot said, led by declines in flooring, countertops and cabinets.
Looking into the 2023 fiscal year, which ends in January, Home Depot said earnings would likely decline between 9% and 11%, compared with its prior forecast of a decline of between 7% and 13%. Comparable sales are seen down between 3% and 4%.
'Pressure in big-ticket categories': Home Depot CEO
"Our quarterly performance was in line with our expectations," said Ted Decker, chairman, president and chief executive. "Similar to the second quarter, we saw continued customer engagement with smaller projects, and experienced pressure in certain big-ticket, discretionary categories."
"We remain very excited about our strategic initiatives and are committed to investing in the business to deliver the best interconnected shopping experience, capture wallet share with the Pro, and grow our store footprint," he added.
"In addition, our associates did an outstanding job delivering value and service for our customers throughout the quarter and I would like to thank them for their dedication and hard work."
Home Depot shares were marked 6.1% higher in early Tuesday trading following the earnings release to change hands at $305.54 each, a move that would extend the stock's six-month gain to around 6%.
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