Home Depot sees softening demand for large projects

May 14, 2024 3:36 pm

Home Depot reported earnings today and shares are down 0.8%. Their guidance is for comp sales to fall 1.0% this year.

“We saw big ticket pressure this quarter,” CEO Edward Decker said. “The dynamic we started to see late last year was a deferral of large-ticket projects and that has increased.”

“Anything that’s financed, we continue to see weakening demand,” CFO Richard McPhail said.

The company highlighted growing market share but they note that the reality is that people spend most in their first year in a new home and turnover in the housing market is low.

“We are seeing interest rates weigh on the consumer,” McPhail said.

Comments like this add to the belief that Fed policy is restrictive and will get the job done on inflation in time. It also adds to risks that they could wait too long to cut.

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