Home Depot earnings top forecasts, but big project pullback keeps forecast in check

Updated at 7:48 am EST

Home Depot HD posted modestly better-than-expected third quarter earnings Tuesday, while narrowing its full-year profit forecasts amid what the home improvement retailer described as pullback in higher-priced items and projects.

Home Depot said earnings for the three months ended in October were pegged at $3.81 per share, down 10.1% from the same period last year 5 cents ahead of the Street consensus forecast. Group revenue, Home Depot said, fell 3% from last year to $37.71 billion, narrowly ahead of analysts' estimates of a $37.61 billion tally.

Same-store sales were down 3.1% from last year, just ahead of Wall Street forecasts of a 3.3% decline, while comparable sales in the U.S. were down 3.5%. Average tickets slipped 0.3% per trip to $89.36, while the number of individual transactions slowed by around 2.4%.

Looking into the 2023 fiscal year, which ends next January, Home Depot said earnings would likely decline between 9% and 11%, compared to its prior forecast of a decline of between 7% and 13% with comparable sales down between 3% and 4%.

"Our quarterly performance was in line with our expectations," said CEO Ted Decker, chair, president and CEO. "Similar to the second quarter, we saw continued customer engagement with smaller projects, and experienced pressure in certain big-ticket, discretionary categories."

"We remain very excited about our strategic initiatives and are committed to investing in the business to deliver the best interconnected shopping experience, capture wallet share with the Pro, and grow our store footprint," he added. "In addition, our associates did an outstanding job delivering value and service for our customers throughout the quarter and I would like to thank them for their dedication and hard work."

Home Depot shares were marked 0.9% in pre-market trading immediately following the earnings release to indicate an opening bell price of $290.60 each, a move that would nudge the stock into positive territory for the past six months.

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