Mixed Q3 results from Home Depot
Sales are up, but earnings slip and sales forecast is lowered for retail giant.
The Home Depot’s investment in stores, supply chain and the integration of online and brick-and-mortar shopping are paying off, but not as fast expected, the company said in its Tuesday morning earnings release. As a result the home improvement giant lowered its sales guidance for the full year.
The Home Depot still produced massive third-quarter numbers — $27.2 billion in sales were up 3.5%, or $921 million, compared to the same quarter last year. Net earnings for the third quarter were $2.77 billion, down 3.4% from $2.87 billion in the year-ago period.
The company’s strategic investments – or “One Home Depot” – have been described as a drive to “a frictionless, interconnected customer experience” and an $11 billion multi-year project. These investments are largely on track and have generated positive results, said CEO Craig Menear. But some of the benefits are taking longer to realize, he said.
Same store sales were up 3.6%, but Wall Street was expecting more.
Looking ahead, the company’s full-year comp-store sales growth is now expected to come in at positive 3.5%, down from previous guidance of 4.0%. Full year sales are expected to grow 1.8%, that’s lower than previous guidance of 2.3%.
While sales reflected broad-based growth across the business, the results fell short of the company’s expectations, said CEO Craig Menear. He added: “We are encouraged by the momentum in our business as we invest to extend our competitive advantages.”
The company did not adjust its guidance for earnings per share.
At the end of the quarter, Home Depot operated a total of 2,290 retail stores throughout North America.
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Bottom line: Third-quarter net earnings were $2.769 billion, down 3.4% from $2.867 billion in the same quarter last year.
What the CEO said: “Sales were below our expectations driven by the timing of certain benefits associated with our One Home Depot strategic investments,” said Menear. “We are largely on track with these investments and have seen positive results, but some of the benefits anticipated for fiscal 2019 will take longer to realize than our initial assumptions.”
For more on Home Depot: See more about the company’s One Home Depot strategy here.
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