Consumer caution, slowdown impact Home Depot’s earnings

Home Depot reported a 3% drop in sales and earnings for the most recent quarter, attributed to a combination of consumer caution and a chilly housing market.

The company had sales of $37.7 billion, 3% less than the same quarter a year ago, and net earnings of $3.8 billion, about 12% less than the same quarter a year earlier.

The decline is likely to continue, as many customers choose smaller projects and relatively few Americans buy and move into homes they want to renovate. The company earned $3.8 billion, or $3.81 a share, in the third quarter ending October 29, down 12% from $4.3 billion a year earlier.

Revenue slipped 3% to $37.7 billion, slightly better than the forecast of $37.6 billion. Sales at stores open at least a year fell 3.1% due to a slowing in the housing market. The company is looking for a drop of between 3% to 4% in store sales in the next three quarters.

Higher interest rates, especially mortgage rates, have slowed home building, with government data showing that housing starts through the first nine months of this year are down 12%.