A customer loads plywood into a truck outside a Home Depot store in Galveston, Texas, Tuesday, Aug. 25, 2020.
Scott Dalton | Bloomberg | Getty Images
Home Depot reported this fourth quarter earnings on Tuesday before the bell.
Here’s what the company posted compared to what Wall Street expected, based on a survey of analysts by Refinitiv:
- Earnings per share: $3.30, versus $3.28 expected
- Revenue: $35.83 billion vs. $35.97 billion expected
For the quarter ended Jan. 29, Home Depot reported revenue of $35.83 billion, up 0.3% from $35.72 billion in the year-ago period. The retailer’s reported net income of $3.36 billion was also up 0.3% from $3.35 billion, or $3.21 per share, in the year-ago period.
Amid record levels of inflation, a shift in consumer behavior and a slowing housing market, the home accessories retailer repeatedly beat Street expectations last year but fell somewhat short of revenue estimates.
The company attributed this only to a decline in lumber costs, which have risen in price due to a nationwide shortage in fiscal 2021. The decline in lumber negatively impacted comparable sales by 0.7%, the company said.
The company provided a subdued outlook for fiscal 2023, expecting revenue and comparable sales to be roughly flat. They project an operating margin rate of about 14.5%, which is impacted by Home Depot’s $1 billion investment in wage growth.
Home Depot expects a mid-single-digit percentage decline in diluted earnings per share.
Home Depot Chief Financial Officer Richard McPhail said the company expects consumer spending to stagnate in the coming quarters and that there will be some pressure in the merchandise sector, leading to a flat outlook.
These days, shoppers are using their spare dollars on experiences and travel as many burn through their savings in the middle consistent inflation.
However, with record high interest rates preventing many people from buying new homes, some consumers may look to renovate their current homes instead of moving, which could be beneficial for sellers.
The company will hold an earnings call with investors at 9:00 a.m. ET.
