Home Depot Shares Slump as Sales and Outlook Miss

By
Bill McColl
Bill McColl
Full Bio

Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

Learn about our editorial policies
Published February 21, 2023
Person entering Home Depot store

Getty Images

Key Takeaways

  • Home Depot (HD) reported fourth quarter and fiscal 2022 results on Feb. 21, 2023.
  • The home goods retailer fell short of expectations on revenue and comparable store sales, although earnings per share (EPS) beat estimates.
  • Sales guidance for 2023 also came in below analysts' forecasts, sending shares lower.

Home Depot (HD) was the worst-performing stock in the Dow as the biggest home improvement retailer posted weaker-than-expected quarterly sales and warned about full-year growth.

Home Depot reported that revenue increased 0.3% to $35.8 billion, and comparable store sales declined 0.3%. Both were below estimates. Customer transactions fell 6%, and sales per retail square foot were down 0.1%. Earnings per share (EPS) of $3.30 beat forecasts.

CEO Edward Decker noted that because of high inflation, rising interest rates, a tight labor market, and moderating equity in housing markets, "we do expect moderation in home-improvement demand."

Guidance Misses Estimates

The company anticipates that 2023 sales and comparable store sales will be approximately the same as in 2022. Analysts were expecting a slight gain. It said that EPS are set to drop by a mid-single-digit percentage, while estimates were for profit to be flat.

The company also announced that it is raising its quarterly dividend by $0.19 to $2.09, and it will spend $1 billion on salary increases for its hourly employees this year.

Home Depot shares sank 7% on Feb. 21, and they've lost 14% in the past year.

Chart showing the price percentage change of Home Depot (HD) over the past year

YCharts
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1. Home Depot. "The Home Depot Announces Fourth Quarter and Fiscal 2022 Results; Plans to Invest Approximately $1 Billion in Annualized Compensation for Frontline, Hourly Associates; Increases Quarterly Dividend by 10 Percent; Provides Fiscal 2023 Guidance."

Take the Next Step to Invest
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.
Service
Name
Description