Home Depot's sales continued to soften in the first quarter as the nation's largest home improvement retailer was not only constrained by high mortgage rates and higher inflation for its customers, but it also had to deal with a delayed start to spring.
Sales slipped 2.3% to $36.42 billion for the period ended April 28, just shy of the $36.65 billion that analysts polled by Zacks Investment Research expected. It was the third consecutive quarter of declining sales for the retailers, which saw sales skyrocket during the pandemic.
Customer transactions dipped 1% in the quarter, with shoppers also spending a bit less, averaging $90.68 per receipt compared with $91.92 a year earlier.
Sales at store open at least a year, a key gauge of a retailer's health, declined 2.8% globally, and 3.2% in the U.S.
Shares fell slightly before the market open on Tuesday.
Last week the average rate on a 30-year mortgage fell for the first time in a month, a slight relief for home shoppers already facing the challenges of rising housing prices and a shortage of homes for sale.
The modest pullback followed a five-week string of increases that pushed the average rate to its highest level since November 30. When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much homebuyers can afford.
For the first quarter, Home Depot Inc. earned $3.6 billion, or $3.63 per share, down from the $3.87 billion, or $3.82 per share, it earned in the same period last year.
But that was better than the $3.61 per share that Wall Street expected.
The Atlanta company maintained its fiscal full-year forecast for total sales growth of about 1%, which includes a 53rd week. It still anticipates same-store sales falling approximately 1% for the 52-week period.