The Home Depot Inc saw its shares fall by nearly 6% on Tuesday after it forecast a fiscal-year profit decline in 2023.
Earnings per share will probably decline by a mid-single-digit percentage, Home Depot said in a release accompanying its fourth-quarter results. Sales growth is expected to be flat in the year through January 2024.
Just like its fellow retailer Walmart, Home Depot is feeling the pinch of inflation as rising prices and lower consumer demand puts a dent into profits.
READ: Walmart shares back on track after disappointing fiscal 2024 outlook
The news overshadowed a healthy 4Q for the home improvement retailer, which saw earnings of $3.30 a share in the quarter, topping the estimate of $3.27.
However, comparable sales for the quarter to end December 31, 2022 fell 0.3%, compared with analyst estimates of a 0.3% gain. Revenue for the quarter came in at $35.8 billion versus the consensus estimate of $35.96 billion.
The firm also announced plans for a $1 billion wage investment for hourly workers in response to a tight labour market in North America.
Shares of Home Depot were trading below the $300 level at the midday point Tuesday, at around $299.50.
Contact Angela at angela@proactiveinvestors.com
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