- Home Depot reported its fourth-quarter results before the bell.
- The hardware store was a clear winner of the pandemic, remaining resilient despite inflation and changing consumer habits.
A customer loads plywood onto a truck in front of a Home Depot store in Galveston, Texas on Tuesday, August 25, 2020.
Scott Dalton | Bloomberg | Getty Images
Home Depot reported fourth-quarter results before the close on Tuesday.
Here’s what the company released, compared to what Wall Street was expecting based on a poll of analysts by Refinitiv:
- Earnings per share: $3.30 versus $3.28 expected
- Revenue: $35.83 billion versus $35.97 billion expected
For the quarter ended Jan. 29, Home Depot reported revenue of $35.83 billion, up 0.3% from the prior-year period of $35.72 billion. The retailer’s reported net income of $3.36 billion was also up 0.3% from the prior-year period, which was $3.35 billion, or $3.21 per share.
Amid record inflation, a shift in consumer behavior and a slowdown in the housing market, the home improvement retailer has repeatedly beat the Street’s expectations over the past year but has fallen slightly short on sales estimates.
The company attributed this solely to a decline in lumber costs, which had risen in price due to nationwide shortages in fiscal 2021. The decline in lumber negatively impacted comparable sales by 0.7%, the company said.
The company provided a muted outlook for fiscal 2023 and expects revenue and comparable sales to be roughly flat. They’re forecasting an operating margin of about 14.5%, impacted by a $1 billion investment Home Depot is making in wage growth.
Home Depot expects diluted earnings per share to decline in the mid-single-digit percentage range.
Richard McPhail, Home Depot’s chief financial officer, said the company expects consumer spending to remain flat in the coming quarters and the merchandise sector to feel some pressure, leading to the unchanged guidance.
Today, shoppers use their spare dollars on experiences and travel as many burn through their savings amid persistent inflation.
However, with record high interest rates discouraging many people from buying new homes, some consumers may be looking to renovate the homes they are currently in rather than move, which could prove beneficial for the retailer.
The Company will host an earnings call with investors at 9:00 am ET.