The American home building materials retail giant Home Depot (HD.US) announced its results for the first quarter of fiscal year 2023. As Home Depot’s Q1 sales fell short of expectations, and the company lowered its full-year sales forecast for fiscal year 2023, as of press time, the stock fell more than 4% before the U.S. market on Tuesday.
The financial report shows that Home Depot’s Q1 net sales were US$37.257 billion, a decrease of 4.2% from US$38.908 billion in the same period last year, which was lower than market expectations of US$38.28 billion. Net profit was US$3.873 billion, down 8.5% from US$4.231 billion in the same period of the previous year; diluted earnings per share were US$3.82, compared to US$4.09 in the same period last year, slightly better than market expectations of US$3.80.
Gross profit was $12.557 billion, down 4.5% from $13.145 billion a year earlier. Operating profit was $5.551 billion, down 6.4% from $5.929 billion a year earlier.
Home Depot said consumers were postponing large projects, shifting to smaller home improvement projects and reducing purchases of big-ticket items like patios and grills. The company also said cooler weather and lower lumber prices also impacted sales in the first quarter, putting more pressure on the business as a whole compared with the fourth quarter of last year.
The company said it now expects fiscal 2023 sales and comparable sales to be down 2%-5% from fiscal 2022 (previously expected to be roughly flat). The company also expects operating margins to decline to between 14% and 14.3% in fiscal 2023 (previously expected to be 14.5%).
Home Depot Chief Financial Officer Richard McPhail said the company expects 2023 to be a year of moderate slowdown after Americans took a huge interest in home improvements during the pandemic, but higher mortgage rates and a shift toward services spending reversed the pace. this trend. “Homeowners have healthy balance sheets, they have healthy income,” he said. “But I do think — and our professional clients tell us — that there is a shift from big projects to small projects, even if it’s temporary .”
Spring is usually the peak season for the home improvement industry. This spring, however, the outlook for Home Depot and its rivals has been more unpredictable. High mortgage rates could dampen the interest of potential homebuyers and drive home prices lower. Groceries and everyday essentials are now an increasing portion of household budgets. Additionally, Americans are now weighing their spending on travel, dining out and other services when discussing kitchen renovations or new appliances.