Atlanta-based home improvement retailer The Home Depot reported 2023 first-quarter sales of $37.3 billion, a decrease of 4.2% from the same quarter in 2022.
For 1Q 2023, net earnings 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,” The Home Depot Chair, President and CEO Ted Decker said in a May 16 release announcing 1Q 2023 earnings.
1Q 2023 Earnings Drop Driven by Lumber Deflation and Weather
Decker said the sales for the quarter were below expectations, primarily driven by lumber deflation and unfavorable weather, particularly in the Western division as extreme weather in California “disproportionately impacted our results.”
“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,” Decker said.
The Home Depot Updates 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:
- Operating margin rate to be between 14.3% and 14%.
- Diluted earnings-per-share-percent-decline between 7% and 13% compared to fiscal 2022.