Atlanta-based Home Depot’s sales continue to slow in 2024 – WABE

Home Depot’s sales continued to slow in the first quarter as the nation’s largest home improvement retailer was not only constrained by high mortgage rates and higher inflation for its customers, but it also faced an early delayed spring.

Sales fell 2.3% to $36.42 billion for the period ended April 28, slightly less than the $36.65 billion expected by analysts polled by Zacks Investment Research. This marks the third consecutive quarter of declining sales for the retailer, which has seen sales soar during the pandemic.

Customer transactions fell 1% in the quarter, with shoppers also spending slightly less, averaging $90.68 per receipt, compared to $91.92 a year earlier.

Sales at stores open at least a year, a key indicator of a retailer’s health, fell 2.8% globally and 3.2% in the United States.

Last week, the average rate on a 30-year mortgage fell for the first time in a month, a slight relief for homebuyers already facing the challenges of rising house prices and shortages. of housing for sale.

This slight decline follows a five-week series of increases that pushed the average rate to its highest level since November 30. When mortgage rates rise, they can add hundreds of dollars per month to costs for borrowers, limiting what homebuyers can afford.

Americans are pulling back on major home improvement projects, like bathrooms and kitchens, and that’s hitting Home Depot, said Neil Saunders, managing director of GlobalData.

“More and more households are hesitant to undertake an activity due to financial constraints or the higher cost of using credit to pay for their work,” Saunders said in an email. “We are also detecting some hesitation among consumers who hope to move in the future and therefore do not want to undertake large improvement projects in the homes they currently live in. »

While people are still spending money on less expensive home decorating projects, Saunders says Home Depot faces increased competition in this area from garden centers, paint specialists and others, and that consumers are looking for the best deals and the best deals.

The professional side of Home Depot’s business is stronger, but Saunders says there are still some areas of weakness.

“Overall, Home Depot remains a great company. Today’s challenges are all caused by a period of churn in the consumer economy rather than corporate missteps. Despite this, we believe the coming year will be one of continuous reset,” he said.

For the first quarter, Home Depot Inc. earned $3.6 billion, or $3.63 per share, down from the $3.87 billion, or $3.82 per share, it had earned during the same period last year.

But it was better than the $3.61 per share Wall Street expected.

The Atlanta company maintained its full-year fiscal forecast of total sales growth of about 1 percent, which includes a 53rd week. It still expects same-store sales to decline by about 1% over the 52-week period.

Shares rose nearly 2% before the market opened Tuesday.