By Uday Sampath Kumar
(Reuters) – Home Depot Inc (NYSE 🙂 on Tuesday blamed wet weather in February and a decline in timber prices for its slow growth in quarterly same store sales for at least three years, while warning of a $ 1
Poor weather, along with soil and labor shortages, has limited the builders' ability to construct new houses especially in the low-cost segment, creating a supply lube for timber, a key building material.
Home Depot said weak timber prices injured sales growth in the first quarter of 200 million. USD, and if prices do not improve for the rest of the financial year, it can dampen overall sales by as much as another $ 600m.
Hours futures have dropped 28.6% since their 2019 heights in early February. The product accounted for almost 8% of Home Depot's sales in the last financial year.
The adverse weather also led the contractors to delay housing projects and prevented the company's do-it-yourself customers from working outdoors and further affecting the demand for Home Depot products in February.
Sales of the same store in the home improvement chain rose 2.5% in the quarter ended May 5, but missed expectations of a 4.2% increase according to IBIN data from Refinitiv.
Home Depot has steadily deployed marginally the overall net revenue estimates as it serves as credit lines and equipment rents for ropes in several large and frequent consumer customers such as electricians, plumbers, and builders.
In a conference with analysts, Edward Decker, director of merchandising, said Washington's latest round of tariffs was $ 200bn. USD worth of Chinese goods would increase annual cost of goods sold by about $ 1 billion.
The company said it has already seen a $ 1 billion. Impact of US tariffs adopted in 2018. However, the impact can be handled, Decker said, as it was less than 1% of total annual sales. In the last financial year, the company's net turnover was DKK 108.2 billion. USD.
"We have not worked through what we will do if the cost increase comes to us," said outgoing CFO Carol Tomé to Reuters when asked if the company would raise its product prices.
"Sometimes, when we have cost increases, we transfer it through retail prices, sometimes we don't."
The company's net income increased to 2.51 billion. $ Or $ 2.27 per. Share and beat the analyst's average estimate of $ 2.18 per share.
Revenue increased 5.7% to EUR 26.38 billion. USD and beat expectations of 26.36 billion. USD.
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