Retailer The Home Depot (HD) has reported mixed first-quarter financial results as consumers continue to reign in spending and postpone big purchases such as appliances and remodels.
Home Depot posted Q1 earnings per share (EPS) of $3.63 U.S., which topped Wall Street forecasts of $3.60 U.S.
However, the company announced revenue of $36.42 billion U.S., which fell short of analyst estimates of $36.66 billion U.S. Sales were down 2.8% from a year earlier.
The results were attributed to higher interest rates that have led shoppers to pullback on their discretionary spending.
Despite the mixed earnings report, Home Depot reaffirmed its full-year guidance, saying it still expects sales to grow about 1%.
Home Depot is also struggling with a difficult housing market due to high interest rates charged on mortgages and a decline in do-it-yourself renovations.
About half of Home Depot’s annual revenue comes from do-it-yourself home improvement projects, while the other half comes from professional contractors.
In recent quarters, Home Depot has seen consumers buy fewer big-ticket items, notably appliances, and take on more modest home improvement projects, a trend that continued in Q1.
Customer transactions declined 1% to 386.8 million and the average ticket price fell 1.3% to $90.68 U.S. during the January through March quarter.
The current situation has led Home Depot to pivot to a new strategy that’s focused on sales to professional contractors and construction companies.
In March, Home Depot announced that it is acquiring SRS Distribution, a privately held distributor of roofing, landscaping, and pool supplies, for $18.25 billion U.S. It is the largest acquisition in Home Depot’s history.
The stock of Home Depot has risen 18% in the last 12 months to trade at $340.96 U.S. per share.
