Home Depot (NYSE: HD) reported its second quarter financial results before the opening bell on Tuesday. The home-goods retailer provided better-than-expected earnings, but missed analysts’ revenue estimates. Despite the revenue miss, Home Depot shares gained 3.7% shortly after the market opened.
For the second quarter, Home Depot reported earnings of USD 3.17 per share on revenue of USD 30.84 Billion. Refinitiv analysts expected earnings of USD 3.08 per share on revenue of USD 30.99 Billion.
Home Depot reported that revenue increased by 1.2% year-over-year, largely due to the momentum it is experiencing in its strategic investments and believe that the current health of the U.S. consumer and stable housing environment is continually growing.
Same-store sales for the quarter were up 3%, falling short of analysts’ estimates of 3.5%.
Customer transactions for the quarter were 455.5 million, remaining flat year-over-year. Average ticket was USD 67.31 at the end of the quarter, a 1.7% growth year-over-year. Meanwhile, sales per square foot rose by 1.1% to USD 509.55.
Despite the marginally growth, Home Depot is forecasting weakness in certain units because of the ongoing tariffs. In particular, Home Depot’s Chief Executive Officer Craig Menar said that its lumber prices have declined compared to last year, which has impacted its overall sales growth.
“Lumber prices have declined significantly compared to last year, which impacts our sales growth. As a result, today we are updating our sales guidance to account primarily for continued lumber price deflation, as well as potential impacts to the U.S. consumer arising from recently announced tariffs.” said Menar.
Based on the impact from the impact of lumber sales, Home Depot is now forecasting fiscal 2019 sales growth of approximately 2.3% and comp sales up 4.0%. Additionally, the Company reaffirmed diluted earnings-per-share growth of USD 10.03, increasing by 3.1% compared to fiscal 2018. Previously, Home Depot expected sales growth of 3.3% for fiscal 2019.