![]() ![]() ![]() “The number of households undertaking projects continued to decline this quarter as people rein back discretionary spending and put off big remodels which sometimes require financing.” “The second factor is the general deterioration in spending even among those who are not moving,” said Saunders. He said slowing activity in the housing market “as higher interest rates deter some from either refinancing to move or taking out mortgages for their first homes” can have a chilling knock-on effect to the home improvement category. Managing Director with Global Data and retail expert Neil Saunders said in a note Tuesday that Home Depot’s slowing sales pace “is somewhat worrying as it reflects an underlying softness which is creeping into the economy.” The real reasons stores such as Walmart and Starbucks are closing in big cities And that clearly impacts items per basket in overall activity.”Ĭhin Hei Leung/SOPA Images/LightRocket/Getty Images So, rather than do an entire room or an entire basement, you start working the way at it in smaller chunks. “And it could be that the projects are being deferred or it could be that the project is being broken up into chunks. “What was newer in our observations this quarter is that while projects are still strong and Pro project backlog is still elevated, the size of the projects are getting a bit smaller,” Decker said during the call. In addition, higher interest rates and inflation are taking a toll. The money that was perhaps previously earmarked for spending on fixing and beautifying the home is now being spent more freely on eating out, traveling, shopping and other indulgences.Īs a result, Decker told analysts during a call held Tuesday to discuss the company’s earnings that business from both its DIY customers and professional contractors in the quarter was less than expected, as consumers continue to take on smaller home improvement projects. David Paul Morris/Bloomberg/Getty ImagesĪmerican consumers are growing worried about a US debt defaultīut just as people have returned to some semblance of a post-pandemic life, for Home Depot, it’s been less of a celebration. will eliminate about 1,800 positions as part of a broader restructuring plan that aims to speed decision-making and reduce overhead expense, the retailer said Thursday. Spending on homes became a priority for families as many Americans suddenly found themselves living, working and studying from home.Ī Gap store in San Francisco, California, US, on Thursday, April 27, 2023. ![]() The change in the tide for Home Depot comes after a long period where it was among a few big winners during the pandemic. It expects sales to decline between 2% and 5% in 2023 from a year prior. The company also lowered its sales expectations for the year. “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,” Home Depot CEO Ted Decker said Tuesday. The retailer also cited falling lumber prices and weather-related challenges, including heavy rains in California during the period, for denting its sales. ![]() Total revenue for the quarter slipped 4.2% versus a year ago, to $37.3 billion. (HD) said sales fell 4.5% at stores open at least a year during its latest quarter, and its income decreased 6.4% from the same stretch a year ago. The retailer posted disappointing sales for its first quarter and lowered its outlook for the year after customers slowed their spending. The home improvement chain reported a dismal quarter as consumer spending on home improvement projects – which was buoyed by the stay-at-home pandemic lifestyle – come to a screeching halt. Home Depot couldn’t keep its protracted robust sales streak going any longer. ![]()
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