Home improvement retailer The Home Depot reported sales of $37.3 billion for the first quarter of fiscal 2023, a decrease of 4.2% from the first quarter of fiscal 2022. Comparable sales for the first quarter of fiscal 2023 decreased 4.5%, and comparable sales in the U.S. decreased 4.6%.
Net earnings for the first quarter of fiscal 2023 were $3.9 billion, or $3.82 per diluted share, compared with net earnings of $4.2 billion, or $4.09 per diluted share, in the same period of fiscal 2022.
“After a three-year period of unprecedented growth for our sector, during which we grew sales by over $47 billion, we expected that fiscal 2023 would be a year of moderation for the home improvement market," said Ted Decker, chair, president and CEO. "Our sales for the quarter were below our expectations primarily driven by lumber deflation and unfavorable weather, particularly in our Western division as extreme weather in California disproportionately impacted our results."
“We also observed more broad-based pressure across the business compared to when we reported fourth quarter results a few months ago. Despite a more challenging environment, our associates maintained their relentless focus on our customers, and I would like to thank them and our many partners for their hard work and dedication. While the near-term environment is uncertain, we remain very positive on the medium-to-long term outlook for home improvement and our ability to grow share in a large and fragmented market,” said Decker.
Fiscal 2023 Guidance
“Given the negative impact to first quarter sales from lumber deflation and weather, further softening of demand relative to our expectations, and continued uncertainty regarding consumer demand, we are updating our guidance to reflect a range of potential outcomes,” said Richard McPhail, executive vice president and chief financial officer.
The company is providing the following updated guidance for fiscal 2023:
- Sales and comparable sales to decline between 2% and 5% compared to fiscal 2022
- Operating margin rate to be between 14.3% and 14.0%
- Tax rate of approximately 24.5%
- Interest expense of approximately $1.8 billion
- Diluted earnings-per-share-percent-decline between 7% and 13% compared to fiscal 2022
