Home Depot Warns of Sales and Profit Decline Amid Weak Consumer Spending

Home Depot has issued a warning of a decline in both annual profit and comparable sales, attributing the downturn to weakened consumer spending and delayed home improvement projects. High borrowing costs and inflation have led customers to postpone significant renovations, such as flooring and kitchen remodels, with higher mortgage rates and home prices further dampening new home sales.

The retailer reported a 3.3% drop in comparable sales, exceeding analysts’ expectations of a 1.98% decline, while customer transactions decreased for the 13th consecutive quarter. In response to the challenging environment, Home Depot has revised its annual forecast, expecting a 3% to 4% drop in comparable sales and a 2% to 4% decline in diluted profit per share. Despite these setbacks, Home Depot is increasing its investments in business segments targeting professional builders and contractors, following its recent acquisition of SRS Distribution, which is projected to add $6.4 billion to its sales for the year.