Home Depot expects weaker sales due to cautious consumers

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STORY: Home improvement behemoth Home Depot on Tuesday warned of a decline in annual profit and a bigger drop in its annual comparable sales…

as weak discretionary spending dampened expectations of a recovery in consumer sentiment this year.

For now, customers are delaying big home projects…

…and are instead waiting for interest rates to fall, according to CEO Ted Decker on a post-earnings call.

Data from Placer.ai also said weak new home sales in May and June led to foot traffic dropping 0.4% in July after a 4.3% rise in June.

Home Depot expects annual comparable sales to drop between 3% and 4%, compared with its prior view of a nearly 1% decline, while diluted profit per share is expected to drop 2% to 4%.

To offset weak demand from individual consumers, Home Depot in June bought materials supplier SRS Distribution to lure more professional builders, roofers, landscapers and pool contractors into its stores.

The company said the deal is expected to add about $6.4 billion to its sales for the year.