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 reported fourth-quarter earnings before the bell Tuesday.
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
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.
The company provided a muted outlook for fiscal 2023 and expects sales and comparable sales to be approximately flat. 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.
Home Depot CFO Richard McPhail said the company expects consumer spending to be flat in the coming quarters and some pressure in the goods sector, which is what led to the flat outlook guidance.
These days, shoppers are using their discretionary dollars towards experiences and travel as many burn through their savings amid consistent inflation.
However, with record-high interest rates keeping many people from buying new homes, some consumers may look to renovate the houses they’re currently in instead of moving, which could prove beneficial for the retailer.
The company will host an earnings call with investors at 9 a.m. ET.
