Home Depot is a leader in the U.S. economy and housing market. The last quarter does not inspire much confidence.
The home improvement chain said Tuesday morning that it had served fewer customers than expected over the past three months.
Its earnings come as Wall Street endures a troubling period of losses. Over the past week all three major stock indices are in the red zone as investor confidence in AI begins to decline.
Traders told the Daily Mail they are looking at consumer brands such as The Home Depot to see if there is weakness in spending.
Tuesday's results offer some signs of hope, and new sources of concern: The company lowered its profit forecast but raised expectations for sales growth.
Overall, Home Depot was hurt by fewer severe storms reaching America's shores, more anxiety among American consumers and a housing market in deep trouble.
In the three months ended Nov. 2, Home Depot earned $3.6 billion. That's a slight decline from a year earlier, when the network earned $3.65 billion.
This is the third quarter in a row that Home Depot, its best performer in years, missed earnings expectations.
The Home Depot lowered its sales forecast for the rest of the year
Shares of Home Depot fell more than four percent before trading opened Tuesday.
Shares of rival Lowe's, which will report quarterly results on Wednesday, fell more than two percent.
Overall, the decline in consumer brands could be a worrying sign, Bret Canwell, US investment analyst at eToro, told the Daily Mail.
Recent interest rate cuts Modest October growth in home construction was expected to boost sales of home improvement brands.
Yesterday, Kenwell said investors were focusing on earnings from chains such as Walmart, Target, TJ Maxx and The Home Depot to test the “health of the U.S. consumer.”
“It will be very important to hear what the management teams in this group have to say,” he added.
But Home Depot executives said Americans simply aren't taking on new home improvement projects.
“Our customers tell us they are staying on the sidelines due to uncertainty and perhaps hesitancy to make larger financial commitments in an uncertain economic environment,” Home Depot Chief Financial Officer Richard McPhail said. Wall Street Journal.
“Our clients are telling us they're staying on the sidelines because of the uncertainty,” the company's chief financial officer, Richard MacPhail, told the Wall Street Journal.
Investors are turning their attention to consumer brands like The Home Depot as Wall Street's optimism about tech companies takes a hit.
The company also stated that it had to raise some prices due to tariffsAccording to Placer.ai, 1.4 percent fewer customers were served and traffic was down 0.4 percent.
“Our clients are homeowners,” McPhail said.
“They're seeing house prices going down in more markets now than going up, and we know they're having trouble getting jobs.”
Kenwell said Home Depot's earnings call today will tell more about the state of the consumer economy.
Meanwhile, investors are holding their breath as they await profits from even bigger companies scheduled for the week.
Nvidia, the world's only $5 trillion company, plans to report earnings on Wednesday. Walmart, America's largest private employer, is scheduled to open Thursday.
Target will also report earnings on Wednesday. There are rumors in the markets that the retailer expects another two percent drop in sales.
