Home Depot’s Q4 Sales Dip Amid Rising Mortgage Rates and Inflation Pressures
20 Fevereiro 2024 - 8:57AM
IH Market News
Home Depot (NYSE:HD) experienced a decline in sales during the
fourth quarter as the leading home improvement retailer in the
country dealt with the repercussions of elevated mortgage rates and
inflation affecting its clientele.
Although the quarterly outcomes surpassed the expectations set
by Wall Street, the company’s projected sales for the upcoming year
put early pressure on its stock value.
The stock value dipped over 3% prior to Tuesday’s market
opening. Competitor Lowe’s, set to announce its fourth-quarter
earnings the following week, saw a decrease of over 2%.
Home Depot disclosed a fourth-quarter revenue of $34.79 billion,
a drop from the $35.83 billion reported in the same period the
previous year. However, this figure still exceeded the $34.55
billion anticipated by analysts according to Zacks Investment
Research.
Comparable store sales, a crucial measure of a retailer’s
performance, decreased by 3.5%. Specifically, in the U.S.,
comparable store sales saw a 4% reduction.
CEO Ted Decker remarked in a statement, “Following three years
of remarkable growth for our business, 2023 was a year of scaling
back.”
The past week saw the average long-term mortgage rate in the
U.S. escalate to its peak in 10 weeks. Freddie Mac, a mortgage
purchaser, reported that the rate for a 30-year mortgage climbed to
6.77% from 6.64% the previous week. This rate was at an average of
6.32% a year earlier.
This rise mirrors the trends in the 10-year Treasury yield,
which is a benchmark for loan pricing by lenders. Unexpectedly high
inflation reports, a robust job market, and the general economic
vigor have heightened concerns that the Federal Reserve might
postpone the reduction of interest rates.
An increase in mortgage rates can significantly raise the
monthly expenses for homeowners, thereby limiting their purchasing
power in an already challenging market for many Americans. It also
deters homeowners who secured extremely low rates a couple of years
ago from putting their properties on the market. The current
average rate for a 30-year mortgage is significantly higher than
the 3.92% observed just two years back.
In the quarter ending January 28, Home Depot Inc. reported
earnings of $2.8 billion, or $2.82 per share, down from the $3.36
billion, or $3.30 per share, earned the previous year.
This performance exceeded the Wall Street projection of $2.77
per share.
Home Depot forecasts a sales growth of approximately 1% for
fiscal 2024, including an additional 53rd week. The company expects
a nearly 1% decline in comparable store sales over the 52-week
span.
Furthermore, the company announced on Tuesday a 7.7% increase in
its quarterly dividend, raising it to $2.25 per share.
Home Depot (NYSE:HD)
Gráfico Histórico do Ativo
De Mar 2024 até Abr 2024
Home Depot (NYSE:HD)
Gráfico Histórico do Ativo
De Abr 2023 até Abr 2024