Home Depot On Tuesday, glued by its sales forecasts in the annual year as a senior manager told CNBC that the retailer did not increase prices due to prices.
“Because of our scale, the major partnerships we have with our suppliers and our productivity that we continue to drive in our company, we intend to generally keep our current price levels in our portfolio,” McPhail told CNBC in an interview.
More than half of what the company sells comes from the United States, he said. McPhail has added that Home Depot and its suppliers have worked to diversify the source of imports of the company in recent years, in particular by reducing the share of purchases from China. At that time next year, no country outside the United States will no longer represent 10% of business purchases, he said.
The Home Depot pricing strategy is in contradiction with Walmart, which said last week that it should increase prices at the end of May to cover higher costs of prices.
McPhail’s comments came while Home Depot published results for the first quarter, after weeks when a range of companies revised or removed its financial guidelines due to the rapidly evolving tariffs of President Donald Trump. The domicile renovation retailer has missed the expectations of the first quarter of Wall Street for the first time since May 2020, but has beat sales estimates.
For the whole year, Home Depot said it expects total sales to increase by 2.8% and comparable sales, which remove the impact of occasional factors such as store openings and calendar differences, to increase by around 1%. Its forecasts are based on the pursuit of an American agreement to temporarily reduce the prices to 30% on imports from China and to 10% for many other countries.
Here is what Home Depot reported for the first tax quarter compared to the estimates of Wall Street, according to a survey of analysts by LSEG:
- Profit by action: $ 3.56, adjusted vs $ 3.59 expected
- Income: $ 39.86 billion against $ 39.32 billion expected
The actions of the company have increased by more than 2% in trade prior to the market.
During the three -month period which ended on May 4, the net profit of Home Depot was $ 3.43 billion, or $ 3.45 per share, against $ 3.60 billion, or $ 3.63 per share, during the period of the previous year. The profit adjusted by action excludes certain costs, including the impact of the depreciation of acquired intangible assets.
Spring is the Home Depot cutting -edge sales season – the Christmas world for improving the house – because owners and entrepreneurs generally attack more projects due to warmer and dry weather. However, even with this seasonal increase, the backdrop of Home Depot remains difficult, because more American consumers have postponed home purchases or the main renovation projects due to higher mortgage rates and loan costs.
Sales growth has been silent. In the first tax quarter, comparable sales dropped by 0.3% throughout the company. In the United States, comparable sales increased by 0.2% from one year to the next.
This trend was persistent, with the exception of the previous quarter. Home Depot broke eight consecutive quarters of the fall in sales comparable to the fourth quarter. During this quarter, comparable sales increased by 0.8% throughout the business.
The sales models have improved over the quarter, said McPhail. Comparable sales decreased by 3.3% from one year to the next in February, increased by 1.3% compared to the period of the previous year in March and increased by 1.8% from one year to the next in April, he said.
He attributed negative results in February to bad weather.
“We have recovered our way in the rest of the quarter and had a high April, and we saw the level of engagement of the customers that we saw in April continue in the first weeks of May,” he said.
While Home Depot looks at a more difficult accommodation background, the company has driven more business from home professionals. He acquired SRS Distribution, a company based in Texas which sells supplies to roofing, swimming pool and landscaping professionals last year in an agreement of $ 18.25 billion.
Home Depot sales – including SRS – increased by around 9% from one year to the other in the first quarter, compared to $ 36.42 billion in the quarter of the previous year. About 2.6 billion dollars of the gain of the year from SRS activities, and part of the sales growth came from new stores, McPhail told CNBC.
In the first tax quarter, customer transactions on the Home Depot website and stores increased by 2.1% from one year to the next. The average ticket, which measures the amount of expenses for these store visits or on website, was $ 90.71, a few cents higher than the quarter of the previous year.
Compared to other retailers, Home Depot is aimed at a richer American consumer who tends to be used and to have benefited from the sharp increase in the value of properties since 2019, McPhail said. About 80% of its customers are owners, he said, and the professionals of the house who buy at Home Depot are aimed at the owners who hire them to fight against roofing and electrical work to a kitchen renovation.
“Our client is in good health, and we think that has supported their level of commitment in improving the house,” he said.
Despite this, McPhail said that customers to do yourself tend to postpone larger projects and engage in smaller projects linked to spring.
Home Depot experienced a positive response to its Spring Black Friday event and its high sales in the device, garden, plumbing and electricity, said McPhail. But he added that sales were softer in areas such as kitchen counters and bath categories – which tend to be purchased in more expensive projects such as renovations and renovations.
From the fence on Monday, Home Depot’s shares are down approximately 2% so far this year. This follows the gains of the S&P 500 of approximately 1% during the same period. Its shares closed $ 379.38 on Monday, bringing its market value to around $ 377 billion.
– Robert Hum of CNBC contributed to this report.
This is a news. Please check the updates.
