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Home Depot to Open 12 new Stores

The Home Depot topped analysts’ expectations for its fourth quarter but its profit and sales fell as demand weakened for big-ticket purchases amid high interest rates.

On its earnings call, the home improvement giant said that consumers are “healthy” and “engaged,” but “engaged at this point in smaller projects.”

Home Depot’s net income fell to $2.8 billion, or $2.82 a share, for the quarter ended Jan. 28, from $3.36 billion, or $3.30 a share, in the year-ago period. Analysts had expected earnings of $2.77. Net sales declined  2.9% to $34.79 billion, toping estimates of $34.64 billion.

Overall same-store sales were down 3.5%. U.S. same-store sales fell 4.0%. “Big-ticket” transactions (over $1,000) were down 6.9%, Home Depot executive VP of merchandising Billy Blastek said on the earnings call.

For the full year, sales declined 3% to $152.7 billion. Comparable sales for fiscal 2023 decreased 3.2%, and comparable sales in the U.S. decreased 3.5%.

“After three years of exceptional growth for our business, 2023 was a year of moderation,” said Ted Decker, chair, president and CEO. “During fiscal 2023, we focused on several initiatives to strengthen the business while also staying true to our strategic investments of creating the best interconnected experience, growing our pro wallet share through our unique ecosystem of capabilities, and building new stores. We remain excited about the future for home improvement and our ability to grow share in our large and fragmented market, which we estimate to be over $950 billion.”

Home Depot, which plans to open 12 stores in 2024, said its board of directors approved a 7.7% increase in its quarterly dividend to $2.25 per share, which equates to an annual dividend of $9.00 per share.  

For fiscal 2024, which includes an extra week, the retailer expects total sales growth of approximately 1.0% (including the 53rd week, which is projected to add approximately $2.3 billion to total sales) and earnings-per-share-percent growth of approximately 1.0%  Comparable sales are expected to decline approximately 1.0%.

At the end of the fourth quarter, the company operated a total of 2,335 retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.

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