Home Depot (HD) Q1 2023 Earnings
Did HD Beat Earnings? Q1 2023 Results
Yes. Home Depot reported Q1 2023 earnings of $3.82 a share on May 16, 2023, beating the $3.80 consensus estimate by 0.5%. Revenue was $37.3B against a $38.3B estimate.
Home Depot delivered a mixed first quarter for fiscal 2023, narrowly beating earnings expectations while falling short on revenue as the home improvement boom that defined the pandemic era continued to unwind. GAAP diluted EPS of $3.82 edged past the $3.80 consensus by 0.53%, but net sales of $37.26 billion missed analyst estimates of $38.28 billion by 2.68% and slid 4.2% from a year earlier, with comparable sales down 4.5%. CEO Ted Decker pointed to lumber deflation and severe weather in California as the primary culprits behind the revenue shortfall, compounding what management described as broader demand softening across the business. Customer transactions fell 4.8% to 390.9 million, underscoring the pullback in consumer engagement, a trend visible across other big-box retailers grappling with similar discretionary spending pressure. Looking ahead, the company trimmed its fiscal 2023 outlook, now guiding for sales and comparable sales to decline between 2% and 5%, with GAAP diluted EPS expected to fall between 7% and 13% compared to fiscal 2022.
- Lumber deflation negatively impacted sales
- Unfavorable weather, particularly extreme weather in California's Western division
- More broad-based demand pressure compared to Q4 2022
- Customer transactions declined 4.8% while average ticket was essentially flat at $91.92
- Comparable sales decreased 4.5% overall and 4.6% in the U.S.
“After a three-year period of unprecedented growth for our sector, during which we grew sales by over $47 billion, we expected that fiscal 2023 would be a year of moderation for the home improvement market. Our sales for the quarter were below our expectations primarily driven by lumber deflation and unfavorable weather, particularly in our Western division as extreme weather in California disproportionately impacted our results.”
Home Depot CEO, on the earnings call
What Was Home Depot's Outlook in Q1 2023?
The Home Depot updated its fiscal 2023 guidance to reflect a range of outcomes amid uncertain consumer demand. The company now expects sales and comparable sales to decline between 2% and 5% compared to fiscal 2022, operating margin rate between 14.0% and 14.3%, a tax rate of approximately 24.5%, interest expense of approximately $1.8 billion, and diluted EPS percent decline between 7% and 13% compared to fiscal 2022. The guidance revision was driven by negative first quarter impacts from lumber deflation and weather, further softening of demand, and continued uncertainty regarding consumer demand.
HD YoY Financials
| Metric | Q1 2023 | Q1 2022 | Year over year |
|---|---|---|---|
| Revenue | $37.3B | $38.9B | −4.2% |
| Gross Profit | $12.6B | $13.1B | −4.5% |
| Operating Income | $5.6B | $5.9B | −6.4% |
| Net Income | $3.9B | $4.2B | −8.5% |
Figures from SEC filings and company reports. Not investment advice.