Home Depot sales decline on Q1 earnings

Yahoo Finance contributor Remy Blaire reports from the New York Stock Exchange to discuss Home Depot Q1 earnings, pull back in home renovation demand, the company's outlook for 2023 sales, and upcoming retail earnings reports this week.

Video transcript

RACHELLE AKUFFO: Softening consumer demand taking a toll on Home Depot's outlook for the fiscal year. Here with more on the latest market action in retail we have Yahoo Finance's contributor Remy Blaire. Remy there on the floor of the New York Stock Exchange. What's going on?

REMY BLAIRE: Well, US equity markets remain mostly lower on this morning. We are seeing the Dow Jones Industrial Average as well as the S&P lower, and the NASDAQ trading on both sides of flat this morning. And of course, Home Depot's shares are in the spotlight today following its latest earnings report, and shares do remain in negative territory.

Earlier, the retail slashed its outlook, and also said that it expects annual sales for the home improvement retailer to fall as consumers cut spending and as demand for home renovations and home improvement goods pull back. Meanwhile, taking a closer look at the details out from the earnings report, Home Depot does expect sales to decline by 2% to 5% in fiscal 2023, and that is a considerable pullback considering that earlier this year the retailer said that it expects to see flat sales.

Meanwhile, first quarter revenue missed analyst forecasts as well with revenue down by 4.2% at $37.26 billion. This is the biggest revenue miss since November 2002. At the same time, comp sales fell by 4 and 1/2 percent for the retailer, much more than expected. At the same time, Q1 profit did come in above estimates at $3.87 billion.

And this week, we will be getting more earnings out from the retail sector. We have Target, as well as TJX companies, Walmart, as well as Foot Locker at the end of this week. Keep in mind that we got US retail sales for the latest month, which did show an increase of 0.4%, but that was 1/2 than the gain expected. And ahead of the report, some analysts you expect to see had ones that are weighing on discretionary spending as US consumers continue to adjust shopping habits, as well as tighten household budgets.

RACHELLE AKUFFO: All right, thank you for that. Obviously, Home Depot an economic bellwether there, sending some jitters through the markets today. A big thank you there, Remy Blaire.