Home Depot Cuts Its Outlook for the Year

Home Depot's second-quarter performance showed a slight sales increase, primarily aided by its recent $18 billion acquisition of contract supplier SRS Distribution. SRS added $1.3 billion in sales, pushing quarterly sales up to $43.18 billion; that surpassed Wall Street's expectation of $42.57 billion. According to GlobalData's Neil Saunders, the acquisition has bolstered Home Depot's specialist category offerings and will provide long-term sales and bottom-line advantages.

Despite the improvement, Home Depot continues to face challenges. Customer transactions fell by 1.8% in the quarter, with the average ticket dropping to $88.90 as compared to $90.07 last year. Sales at stores open for at least a year fell by 3.3% in the quarter. Home Depot has now revised its 2024 growth outlook and anticipates a sales decline of 3% to 4% at long-established stores, compared to an earlier forecast of about a 1% decline.

CEO Ted Decker highlighted the current economic pressures, attributing weaker home improvement spending to higher interest rates and macro-economic uncertainty. Elevated mortgage rates have significantly dampened homeowner enthusiasm, further dragging on the housing market. Home Depot's shares slipped 3% before the opening bell amid broader concerns about the home improvement sector's future. Despite this, Decker asserts that the long-term fundamentals supporting home improvement demand remain strong. (This story was generated by Newser's AI chatbot. Source: the AP)