Home Depot issues a warning about the economy
The home improvement giant, a bellwether of consumer spending and the housing market, lowered its sales expectations for the year. It said customers were spending less on home improvement projects, pressured by higher interest rates and concerns that the economy is getting worse.
“During the quarter, higher interest rates and greater macro-economic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects,” Ted Decker, Home Depot’s CEO, said in a news release.
Home Depot said Tuesday it expects sales at stores open at least 12 months to fall between 3% and 4% this year compared to last year. That’s down from its earlier estimate that sales would fall about 1% by that measure.
Consumer demand for home improvement has been slumping for about a year, and the company said the story hasn’t changed much. Still, Decker remained optimistic, saying “The underlying long-term fundamentals supporting home improvement demand are strong.”
Home Depot’s (HD) stock fell nearly 5% in premarket trading.
This is a developing story and will be updated.
In light of the economic uncertainties and higher interest rates, investors might want to reconsider their strategies in the home improvement business sector, considering Home Depot's downturn. The CEO of Home Depot, Ted Decker, despite the company's decreased sales expectations, remains hopeful about the long-term potential of the home improvement business.
