Skip to content
Trending
July 7, 2025Fast-casual restaurants lean on loyalty programs to offset consumer pullback July 9, 2025Trump threatens to impose up to 200% tariff on pharmaceuticals ‘very soon’ July 10, 2025Most Fed officials see rate cuts coming, but opinions vary widely on how many, minutes show July 10, 2025Inflation expectations drift back down to pre-tariff levels, New York Fed survey shows July 8, 2025‘F1’ is Apple’s highest-grossing theatrical film ever July 8, 2025BlackRock keeps its foot on the private-markets pedal with another acquisition July 8, 2025Brown-Forman shares plummet as whiskey maker warns of tariff uncertainty July 7, 2025Why Trump tax deductions โ€” for tips, car loans and more โ€” may not carry large benefits for low earners July 7, 2025Tariffs and weaker beer demand are weighing on Modelo owner Constellation Brands July 7, 2025With June jobs report looming, DOGE government layoffs could start becoming a factor
EverydayRead
  • HOME
  • Business
  • Earnings
  • Economy
  • Finance
  • Lifestyle
EverydayRead
EverydayRead
  • HOME
  • Business
  • Earnings
  • Economy
  • Finance
  • Lifestyle
EverydayRead
  Earnings  Home Depot expects sales to weaken as consumers grow more cautious
Earnings

Home Depot expects sales to weaken as consumers grow more cautious

AdminAdmin—August 14, 20240

Home Depot< button class="AddToWatchlistButton-watchlistButton" aria-label="Add To Watchlist" data-testid="dropdown-btn">

on Tuesday topped quarterly expectations, but cautioned that sales will be weaker than expected in the back half of the year as high interest rates and consumer uncertainty dampen demand.

The home improvement retailer said it now expects full-year comparable sales to decline by 3% to 4% compared with the prior fiscal year. It had previously expected comparable sales, a metric that takes out the impact of store openings and closures and other one-time factors, to decline about 1%.

Home Depot’s total annual sales will get a boost from its recently completed acquisition of SRS Distribution, a company that sells supplies to professionals in the landscaping, roofing or pool businesses. Total sales are expected to increase between 2.5% and 3.5% including a 53rd week in the fiscal year and approximately $6.4 billion in sales from SRS. Yet excluding sales from SRS, its new full-year forecast would have amounted to a revenue cut.

In an interview with CNBC, Chief Financial Officer Richard McPhail said Home Depot has contended with consumers who have a “deferral mindset” since the middle of 2023. Interest rates have caused them to put off buying and selling homes and borrowing money for bigger projects, such as a kitchen renovation. 

Yet over the past quarter, he said surveys of customers and home professionals like contractors have captured another challenge: a more cautious consumer.

“Pros tell us that, for the first time, their customers aren’t just deferring because of higher financing costs,” he said. “They’re deferring because of a sense of greater uncertainty in the economy.”

Here’s what the company reported compared with what Wall Street expected for the three-month period that ended July 28, based on a survey of analysts by LSEG:

  • Earnings per share: $4.60 vs. $4.49 per share expected
  • Revenue: $43.18 billion vs. $43.06 billion expected

The company’s shares closed more than 1% higher Tuesday.

Home Depot kicks off a wave of retail earnings, as economists, investors and politicians pay close attention to the health of the American consumer and try to forecast the economic outlook, including the odds of a recession. Though inflation has cooled, higher prices โ€“ particularly for everyday costs like groceries, energy and housing โ€“ continue to frustrate customers. They’ve also become a major talking point on the 2024 campaign trail.

Consumer clues will keep coming this week and next, as Walmart reports earnings and the government shares retail sales numbers on Thursday. Other retailers, including Target, Macy’s and Best Buy, will also post results in the coming weeks.

More stories

Zscaler jumps 10% on strong results fueled by AI growth

June 1, 2025

Broadcom says it will sell $12 billion in AI parts and custom chips this year

September 8, 2024

AI chipmaker Broadcom shares soar 17% despite mixed quarterly results โ€” here’s why

January 2, 2025

Nike says tariffs will cost it $1 billion before price increases, supply chain shifts

June 28, 2025

Compared with many other retailers, Home Depot has a more financially stable customer base. About half of its sales come from home professionals and about half come from do-it-yourself customers. About 90% of those DIY customers own their own homes.

Yet Home Depot still felt the impact of consumer uncertainty, McPhail said. He said the company saw slower demand for a wide range of project-driven items, including lighting and flooring.

Home Depot’s net income for the fiscal second quarter decreased to $4.56 billion, or $4.60 per share, from $4.66 billion, or $4.65 per share, in the year-ago period.

Revenue rose slightly from $42.92 billion in the year-ago period.

Comparable sales dropped 3.3% in the quarter across the business and declined 3.6% in the U.S. That was worse than the 2.1% decrease that analysts expected, according to StreetAccount.

It marked the seventh consecutive quarter of negative comparable sales at Home Depot.

Shoppers visited Home Depot’s stores and its website less frequently, and spent less when they did, during the quarter compared to the year-ago period. Customer transactions fell nearly 2% and average ticket dropped slightly to $88.90 from $90.07 in the year-ago quarter

Consumers have postponed projects in part because of a widely anticipated rate cut by the Federal Reserve, McPhail said. In late July, Fed Chair Jerome Powell said policymakers could cut rates at the central bank’s September meeting if the data supports it.

That would lead to lower mortgage rates and borrowing costs for homeowners who want to tack on an addition or finance a project, such as a bathroom remodel.

“What our customers tell their pros is, ‘Everything I read tells me interest rates will be lower in three to six months,'” McPhail said. “‘Why would I borrow to finance the project now rather than just wait a few months?'”

Yet Home Depot leaders have emphasized home improvement’s bright long-term outlook, referring to the country’s aging homes, its shortage of houses and significant property value gains, especially during the years of the Covid pandemic. 

And McPhail said most of Home Depot’s customers remain financially healthy and employed, even if they’re spending less on home improvement right now.

Shares of Home Depot closed at $345.81 on Monday. As of Monday’s close, the company’s shares are down less than 1% so far this year, trailing behind the S&P 500’s 12% gains. 

โ€“ CNBC’s Robert Hum contributed to this story.

Why Wall Street thinks Brian Niccol is the person to revive Starbucks โ€” and end the Howard Schultz era
Wednesday’s big CPI inflation report could mark a change in thinking for the Fed
Related posts
  • Related posts
  • More from author
Earnings

MongoDB close up 13% after company boosts guidance, cites confidence in cloud-based database service

July 9, 20250
Earnings

Brown-Forman shares plummet as whiskey maker warns of tariff uncertainty

July 8, 20250
Earnings

Tariffs and weaker beer demand are weighing on Modelo owner Constellation Brands

July 7, 20250
Load more
Read also
Finance

Most Fed officials see rate cuts coming, but opinions vary widely on how many, minutes show

July 10, 20250
Economy

Inflation expectations drift back down to pre-tariff levels, New York Fed survey shows

July 10, 20250
Earnings

MongoDB close up 13% after company boosts guidance, cites confidence in cloud-based database service

July 9, 20250
Business

Trump threatens to impose up to 200% tariff on pharmaceuticals ‘very soon’

July 9, 20250
Finance

BlackRock keeps its foot on the private-markets pedal with another acquisition

July 8, 20250
Economy

Trump threatens extra 10% tariff on countries that align with ‘Anti-American’ BRICS policies

July 8, 20250
Load more
ยฉ 2023, All Rights Reserved.
  • About Us
  • Advertise With Us
  • Contact Us
  • Disclaimer
  • Cookie Law
  • Privacy Policy
  • Terms & Conditions