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Shares of Home Depot (NYSE:HD) are trading more than 4% lower in pre-market Tuesday after the company reported lower-than-expected comparable sales for the fourth quarter.
Home Depot reported earnings per share of $3.30 on revenue of $35.8 billion, which compares to the analyst consensus of $3.28 on sales of $35.96B. In addition to a revenue miss, the company also said its comparable sales fell 0.3% in Q4, worse than the expected increase of 0.3%.
U.S. comparable sales declined 0.3%, better than the expected decline of 0.9%. Home Depot also reported a 6% drop in customer transactions, in line with the average analyst estimate. On the other hand, the average ticket increased by 5.8%, missing the 6.4% consensus.
Home Depot reported merchandise inventories of $24.89B, better than the estimate of $25.53B.
“Fiscal 2022 was another record year for The Home Depot as our team continued to successfully execute in a challenging and dynamic environment,” said Ted Decker, chair, president and CEO. “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.”
Investors were also disappointed to hear that HD expects flat sales growth and comparable sales growth relative to 2022. Diluted EPS is seen declining mid-single digits.
Vital Knowledge analysts said the guidance is “light” and “underwhelming” while the Q4 results “aren’t great.”
“The only silver linings were inventory (which saw a large drop in the Y/Y rate of growth and fell Q/Q) and low expectations (no one had high hopes for a blow-out print out of HD),” the analysts wrote.
