Home Depot Inc (NYSE:HD) stock rose 0.39% (As on August 13, 11:24:21 AM UTC-4, Source: Google Finance) after the company topped quarterly expectations, but cautioned that sales will be weaker than expected in the back half of the year as high interest rates and consumer uncertainty dampen demand. Home Depot’s net income for the fiscal second quarter decreased to $4.56 billion from $4.66 billion, in the year-ago period. Comparable sales dropped 3.3% in the quarter across the business and declined 3.6% in the U.S. That was worse than the 2.1% decrease that analysts expected, according to StreetAccount. Further, Shoppers visited Home Depot’s stores and its website less frequently, and spent less when they did, during the quarter compared to the year-ago period. Customer transactions fell nearly 2% and average ticket dropped slightly to $88.90 from $90.07 in the year-ago quarter
Meanwhile, home prices are sky-high nationwide and demand for housing still overwhelms supply in most markets. The median price of a previously owned home in the United States rose to $426,900 in June, up 4.1% from a year earlier, according to the latest data from the National Association of Realtors. However, mortgage rates have steadily fallen over the past several weeks since reaching a 2024 peak of 7.22% in early May.
HD in the second quarter of FY 24 has reported the adjusted earnings per share of $4.60, beating the analysts’ estimates for the adjusted earnings per share of $4.49, based on a survey of analysts by LSEG. The company had reported the adjusted revenue growth of 0.6 percent to $43.18 billion in the second quarter of FY 24, beating the analysts’ estimates for revenue of $43.06 billion. Adjusted operating income for the second quarter of fiscal 2024 was $6.6 billion and adjusted operating margin was 15.3%, compared with adjusted operating income of $6.6 billion and an adjusted operating margin of 15.5% for the second quarter of fiscal 2023.
The company is now expecting 2024 sales at stores open at least a year to decline between 3% and 4%. Its previous outlook was for a decline of approximately 1%. Home Depot expects full-year earnings per share to fall between 2% and 4%. Previously, the company predicted earnings per share growth of about 1%. Total sales for the year, the company said, are expected to be up 2.5% to 3.5%. Its prior guidance was for an increase of about 1%. Home Depot’s total annual sales will get a boost from its recently completed acquisition of SRS Distribution.