Home Depot Q2 impacted by lumber prices
Soft lumber prices and tariffs cut into sales growth and guidance.
The Home Depot reported second quarter 2019 sales edged upward just 1.2% to $30.8 billion from second quarter 2018 sales of $30.5 billion.
The Atlanta, Ga.-based retailer also reported a second quarter net earnings of $3.5 billion, which were essentially flat compared to net earnings of $3.5 billion for the same period a year ago.
Comp sales for the quarter grew 3% while comp sales in the United States rose 3.1%.
The world’s largest home improvement retailer acknowledged that declining lumber prices have had an impact on the company’s sales growth. The Home Depot also revised its guidance for 2019, saying sales are expected to grow 2.3% for the year with comps forecast to rise 4% in fiscal 2019.
This is a downward revision from guidance provided by The Home Depot in May when the company forecast 3.3% sales growth in 2019 along with 5% comp growth.
As of the end of the second quarter, the company operated 2,291 stores in all 50 states, Washington, D.C., Puerto Rico, Guam, the U.S. Virgin Islands, Mexico and Canada.
The bottom line: Sales are nearly flat rising just 1.2% to $30.8 billion while earnings are flat at $3.5 billion.
What the CEO said: “We are encouraged by the momentum we are seeing from our strategic investments and believe that the current health of the U.S. consumer and a stable housing environment continue to support our business. That being said, lumber prices have declined significantly compared to last year, which impacts our sales growth,” said Craig Menear, chairman, CEO and president of The Home Depot. “As a result, today we are updating our sales guidance to account primarily for continued lumber price deflation, as well as potential impacts to the U.S. consumer arising from recently announced tariffs.”
Company info: The Home Depot’s full second quarter 2019 report can be read here.
No comments found