Sliding sales at the home improvement giant Home Depot in the first quarter of the year mark the end of a three-year boom for the company led by consumers taking on home improvement projects amid pandemic lockdowns and leading into the remote work era.
The company reported $37.3 billion in sales for the first quarter of fiscal 2023, down 4.2 percent from the same period last 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, Ted Decker, Home Depot’s chair, president and CEO said in a statement.
“Our sales for the quarter were below our expectations primarily driven by lumber deflation and unfavorable weather, particularly in our Western division as extreme weather in California disproportionately impacted our results,” he added.
The company is also expecting sales to slump for the remainder of the year given the uncertain weather conditions and expected decline in consumer demand.
Updated guidance projects sales to decline between 2 percent and 5 percent compared to fiscal year 2022.
“Given the negative impact to first quarter sales from lumber deflation and weather, further softening of demand relative to our expectations, and continued uncertainty regarding consumer demand, we are updating our guidance to reflect a range of potential outcomes,” said Richard McPhail, executive vice president and chief financial officer.
Pandemic-era social distancing restrictions, near-zero interest rates and federal stimulus payments spanning two administrations led to a major boom in the home improvement industry. But consumers have pulled back as prices have risen across the board.
Figures released by the Census Bureau on Tuesday showed retail sales picked up in March by 0.4 percent after falling by 0.7 percent in March. They were up 0.5 percent from last year.
Non-store retailers were up 8.0 percent from last year, while food and drink sales were up 9.4 percent.