Home Depot (HD) -) on Tuesday posted stronger-than-expected fiscal-second-quarter earnings while reiterating its full-year profit forecast, as the home improvement retailer said it sees continued pressure on big ticket sales.
Home Depot said earnings for the three months ended in July were pegged at $4.65 a share, down 7.9% from the year-earlier period but 20 cents ahead of the Wall Street consensus forecast. Group revenue fell 2% from a year earlier to $42.92 billion, topping analysts' estimates of a $42.23 billion tally.
Same-store sales were down 2% from a year earlier, ahead of Wall Street forecasts, while comparable sales in the U.S. were down 2%. Average tickets rose 0.05% per trip to $90.07, while the number of individual transactions slowed by around 1.8%.
Looking into the 2023 fiscal year, which ends next January, Home Depot reiterated its overall earnings forecast to a decline of between 7% and 13% with comparable sales down between 2% and 5%.
"We were pleased with our performance in the second quarter," said Chief Executive Ted Decker. "While there was strength in categories associated with smaller projects, we did see continued pressure in certain big-ticket, discretionary categories."
"We remain very positive on the medium-to-long term outlook for home improvement and our ability to grow share in a large and fragmented market," he added. "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, a Dow component, were marked 0.85% higher in early Tuesday trading to change hands at $332.72 each.
"The company noted strength in smaller project categories but continued to see pressure in big-ticket discretionary categories, aligning with trends seen in our proprietary Key First Look Data, which pointed to continued weakness in home improvement trends, and a challenged industry backdrop," said KeyBanc Capital Markets analyst Bradley Thomas.
"Management noted that the Company remains positive on the medium-to-long term outlook for home improvement and its ability to grow market share in a large and fragmented market," he added. "As such, the Company reiterated its 2023 outlook ... which implies a range of $14.52 to $15.52" for EPS.
