Home Depot Inc. raised its full-year outlook on Tuesday despite reporting weaker third-quarter earnings, as revenue growth was offset by rising costs.
Home Depot quarterly earnings slip
The Georgia-based home improvement retailer reported a 4.3% decline in net earnings, down to $3.65 billion for the quarter ending October 27, compared to $3.81 billion in the same period last year. Diluted earnings per share fell 3.7% to $3.67 from $3.81.
However, net sales increased by 6.6% to $40.22 billion, up from $37.71 billion, as the cost of sales rose 7.3% to $26.79 billion from $24.97 billion. Operating expenses also grew, climbing 9.2% to $8.00 billion from $7.33 billion.
The company’s short-term debt increased to $1.34 billion, up from zero a year ago, while long-term debt (excluding current installments) jumped 23% to $50.06 billion from $40.57 billion.
“Our third-quarter performance exceeded expectations despite ongoing macroeconomic uncertainty,” said CEO Ted Decker. “We saw improved engagement in seasonal goods and outdoor projects, along with additional sales driven by hurricane-related demand as weather normalized.”
Expectations for full-year
Customer transactions dipped slightly by 0.2% to 399.0 million from 399.8 million, and sales per retail square foot decreased 2.1% to $582.97 from $595.71.
For the full fiscal year, Home Depot now anticipates total sales growth of 4%, up from its previous forecast of 2.5% to 3.5%. Comparable sales are projected to decline by around 2.5%, a more optimistic outlook than the prior forecast of a 3% to 4% drop. The company also expects diluted earnings per share to be 2% lower than last year’s $15.11, an improvement from its earlier guidance of a 2% to 4% decline.
