Home Depot (HD) is expected to report its fiscal first quarter 2023 earnings results Tuesday before market open as consumer spending on home improvement softens compared to the pandemic boom.
Analysts are expecting a decline year-over-year in revenue for the home improvement giant as well as a decline in earnings and same-store sales. Analysts are also keeping an eye on the impact of unfavorable weather in March and April, in addition to the pullback of consumer spending March, as well as a “softer housing market backdrop,” per Credit Suisse.
Here’s what Wall Street expects from Home Depot, per Bloomberg estimates:
Revenue: $38.34 billion expected, down 1.5% from a year ago
Adjusted earnings per share: $3.80 per share expected, down 7.1% from a year ago
Same-store sales: down 1.42% expected
Wall Street also expects customer transactions to decline compared to last year, down 5.36%, although inflation is likely to have driven higher average ticket sizes, up 2.63%.
In a note from Credit Suisse, the firm said it expects “near term headwinds that could keep demand for home improvement under pressure.”
When it comes to a higher ticket, the firm said: “Inflation was the main driver of growth in home improvement last year, and we expect moderation in inflation through 2023, and key commodity categories, such as lumber, are significantly deflationary.”
Meanwhile, in line with consensus estimates, the firm said, “Transactions will likely continue to see y/y declines through the course of 2023 despite easy comparisons, moving closer to 2019 levels or below, as the project backlogs normalize.”
Credit Suisse also anticipates that consumers seem “to be increasingly judicious with respect to their spending on big-ticket, discretionary purchases,” such as floor replacements.
Year-to-date, shares of Home Depot are down nearly 9%, trailing behind the S&P 500 (^GSPC), up nearly 8%. Holding onto gains made during the pandemic, shares compared to March 2020 are up more than 30%.
As of Monday, Wall Street has 23 Buys, 14 Holds and 2 Sells on the street.
Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at firstname.lastname@example.org.