Home Depot cuts outlook as softening demand hits sales
BNN Bloomberg
Home Depot Inc. cut its outlook for the year after first-quarter sales dropped more than expected, a sign that economic uncertainty is leading to a pullback in home improvement spending.
The company now expects comparable sales to decline as much as five per cent this fiscal year — the first annual fall in 14 years — following a bad start to the year affected by lumber deflation and poor weather, it said Tuesday. Home Depot, which previously predicted sales would remain flat this year, said demand is softening more than it had expected.
The first-quarter results show the company’s performance is starting to lag after several years of soaring home-improvement spending that was sparked by a booming housing market and stimulus payments that let consumers invest in their homes during pandemic restrictions. That binge has now begun to slow amid rising inflation and interest rates.
The stock was down 1.5 per cent as of 10:01 a.m. in New York. Competitor Lowe’s Cos., which reports earnings next week, fell 1.9 per cent.
