Home Depot (HD) posted better-than-expected fourth quarter earnings Tuesday, but cautioned that 2023 profits will likely be flat to last year's levels as consumers rein in spending amid persistent inflation pressures.
Home Depot said earnings for the three months ending in January, the company's fiscal fourth quarter, were pegged at $3.30 per share, up 2.8% from the same period last year and 2 cents ahead of the Street consensus forecast. Group revenues, Home Depot said, were essentially flat from last year at $35.83 billion, just shy of analysts' estimates of a $35.97 billion tally.
Same store sales were down 0.3% from last year, Home Depot said, while comparable sales in the U.S. were down 0.3%, a figure that also missed Street forecasts. Average tickets rose 5.8% per trip to $90.05, even as the number of individual transaction slowed by around 6%.
Looking into the 2023 fiscal year, which ends next January, Home Depot reiterated that it sees a 'mid single digit' earnings decline, with comparable sales expected to be flat to 2022 levels.
"Fiscal 2022 was another record year for The Home Depot as our team continued to successfully execute in a challenging and dynamic environment," said CEO Ted Decker. "Our ability to deliver growth on top of the $40 billion of sales growth achieved over the prior two-year period, while navigating persistent inflation, ongoing global supply chain disruptions, and a tight labor market, is a testament to investments we have made in the business, as well as our associates' relentless focus on our customers."
Home Depot shares were marked 6.4% lower in early afternoon trading following the earnings release to change hand at $297.57 each.
"While Home Depot continues to exhibit share gains, our survey work points toward further deceleration in near-term Pro trends, along with concerns about weaker consumer confidence and inflationary pressures, which remains a risk for the industry in 2023," said KeyBanc Capital Markets analyst Bradley Thomas
