Home Depot blames weak sales on brutal spring weather

NY Post

Lisa Fickenscher

May 15, 2018

Gardeners had no use for Home Depot in the last quarter.

“This was the coldest, snowy, wettest March and April in 25 years,” said Chuck Grom, an analyst at Gordon Haskett.

The brutal spring weather wreaked havoc on the home-improvement chain, which reported weaker sales in the most recent quarter as fewer people bulked up on gardening supplies, the company said.

“This is clearly a garden story for us,” Chief Executive Craig Menear said on an earnings call on Tuesday.

The chain has been the darling of the retail industry, benefitting from strong consumer spending, posting robust sales increases for nearly a decade. But the start to the new year was an unexpected stumble.

Customer transactions were down 1.3 percent, the first such decline in the first quarter since 2011, while the average transaction rose a whopping 5.8 percent, the largest increase since 2004, largely due to price increases.

Sales at the 2,285-store chain missed Wall Street’s expectations, rising 4.2 percent, to $24.95 billion, while same-store sales rose 3.9 percent.

“It’s too early to call a down trend in the home-improvement sector, but we are closer to the end of the housing market recovery than the beginning,” Loop Capital Markets analyst Laura Champine.

Home Depot’s stores in the north were hit the hardest, Meanear said, adding that sales in the rest of the country had been trending toward high-single-digit growth.

In the first couple of weeks of May, he added, comparable sales across the chain increased by at least 10 percent.
Shares fell 1.6 percent, to $187.98.