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  • Writer's pictureRealFacts Editorial Team

Home Depot Misses Earnings. Why That's Bad For The Economy.


Home Depot storefront

Coming into this week of earnings, most on the street are looking at the big consumer/retailers for signs of how the average American consumer is doing. One of the main retailers that analysts are looking at, Home Depot, just reported earnings and they don’t look promising for the economy. Sabrina Escobar and Adam Clark of Barron’s wrote, “Home Depot reported first-quarter earnings of $3.63 a share. Revenue came to $36.4 billion for the quarter, down 2.3% from the same period a year earlier. Same-store sales fell 2.8%, and same-store sales in the U.S. dropped 3.2%. Analysts had expected adjusted earnings per share of $3.60 on revenue of $36.6 billion, and a drop in same-store sales of 2.2%, according to FactSet consensus estimates.”

 

High interest rates, and their impact on the U.S. housing market are the main reason for these lackluster earnings. With a slow housing market, fewer people are starting new renovation projects and thus they are taking fewer trips to Home Depot. Although the housing market is slowly picking up steam, high interest rates and inflated home prices are still keeping people out of the market. Many analysts believe that conditions will remain the same at least for the first half of this year, we will have to wait for interest rate decisions in the second half of the year to see how things will go from there. Attention now turns to the upcoming earnings reports of other big-box retailers such as Walmart.


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