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Home Depot Falls Short of Expectations on Fiscal Q4 2022 Revenue

UTC by Ibukun Ogundare · 3 min read
Home Depot Falls Short of Expectations on Fiscal Q4 2022 Revenue
Photo: Depositphotos

The recent plunge caused by the fiscal Q4 2022 financial performance has caused Home Depot to lose almost 2% in its stock price in the last five days. 

Multinational home improvement retail corporation Home Depot (NYSE: HD)has released its fiscal Q4 2022 earnings report, revealing that revenue fell short of Wall Street’s estimates. While analysts surveyed by Refinitiv expected revenue to come in at $35.97 billion, the company reported $35.83 billion. Notably, the fiscal Q4 2022 period was the first time Home Depot fell short of revenue expectations in over three years. The last time the company did not meet up with Wall Street’s estimates was in November 2019. Following the release of the quarterly report, the retailer lost a little over 4% in premarket trading.

Home Depot Announces Fiscal Q4 2022 Financial Results

Home Depot recorded $35.8 billion in sales during fiscal Q4 2022, representing a 0.3% addition YoY or a gain of $112 million. In the same period last year, the company realized $35.72 billion in sales. In addition, net earnings were $3.36 billion or $3.30 per diluted share. Meanwhile, it saw $3.35 billion or 3.21 per share in fiscal Q4 2021. This means the retailer’s net income in the recently-concluded quarter jumped 0.3% more than the year-ago period.

Home Depot has managed to survive the windy storm of record inflation levels and a shift in consumer behavior. The decelerating housing market could also potentially impact the company. However, the retailer has consistently exceeded expectations over the past year but fell short in sales estimates. The company’s chair and CEO, Ted Decker, also acknowledged last year’s unpleasant market situation. He commended The Home Depot team’s effort through a “challenging and dynamic environment” in 2022. He continued:

“Our ability to deliver growth on top of the $40 billion of sales growth achieved over the prior two-period, while navigating persistent inflation, ongoing global supply chain disruptions, and a tight labor market, is a testament to investments we have made in the business, as well as our associates’ relentless focus on our customers. I would like to thank our associates and our many parents for their hard work and dedication to our customers.”

The Home Depot said it had experienced more stability in recent months after the high volatility that lasted since 2021. The company expects sales growth and comparable sales growth to be approximately flat in fiscal 2023 compared to fiscal 2022. Also, the company expects the operating margin rate for the current fiscal year to be about 14.5%, representing approximately $1 billion in additional annual compensation for the frontline.

Chief financial officer Richard McPhail explained that Home Depot expects consumer spending to be flat. The CFO said the market experienced a gradual shift in the last two years. McPhail revealed that the retailer saw a shift in goods during the coronavirus pandemic.

The recent plunge caused by the fiscal Q4 2022 financial performance has caused Home Depot to lose almost 2% in its stock price in the last five days.

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