Home Depot Cuts Sales Forecast, Posts Slightly Lower Profit
August 20 2019 - 7:19AM
Dow Jones News
By Kimberly Chin
Home Depot Inc. lowered its sales forecast as the company warned
that rising material costs as well as the potential effects of
tariffs on U.S. consumers could weigh on growth.
The home-improvement retailer said fiscal 2019 sales growth
would increase by 2.3%, down from its previous guidance of 3.3%.
Same-store sales are projected to grow by about 4%, 1 percentage
point lower than its previous forecast. The company affirmed its
earnings guidance.
Despite positive signs of a stable housing market, lumber-price
deflation is expected to negatively affect sales growth, the
company said.
Overall sales rose 1.2% for the quarter to $30.84 billion from a
year ago. Analysts projected sales of $31 billion, according to
FactSet.
The number of customer transactions was flat from a year ago
while average ticket prices, or the amount of money customers spent
per visit, rose 1.7%. Same-store sales -- a common metric in retail
based on revenue at stores open at least one year -- rose 3%.
Analysts expected a 3.3% rise.
Home Depot said second-quarters earnings were $3.48 billion, or
$3.17 a share, down from $3.51 billion, or $3.05 a share, a year
earlier, primarily due to higher expenses. Expenses rose 1.3% in
the quarter. Analysts projected earnings of $3.09 a share.
Shares of Home Depot rose 0.8% premarket on low trading
volumes.
Write to Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
August 20, 2019 07:04 ET (11:04 GMT)
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