Shares of Home Depot Inc. were knocked lower Tuesday, after the home improvement retail giant topped fiscal fourth-quarter net sales expectations but missed on U.S. same-store sales and provided a downbeat full-year outlook.
“After three years of exceptional growth for our business, 2023 was a year of moderation,” said Chief Executive Ted Decker.
On the bright side, the company beat profit expectations, and raised its quarterly dividend by 7.7%.
The stock
HD,
dropped 2% in premarket trading. The implied price decline would shave about 48 points off the price of the Dow Jones Industrial Average
DJIA,
while Dow futures
YM00,
slid 117 points, or 0.3%.
Net income for the quarter to Jan. 28 fell to $2.8 billion, or $2.82 a share, from $3.36 billion, or $3.30 a share, in the same period a year ago, to beat the FactSet consensus of $2.77.
Net sales fell 2.9% to $34.79 billion, above the FactSet consensus of $34.64 billion.
Overall same-store sales, or sales from stores open at least a year, decreased 3.5% and U.S. same-store sales declined 4.0%, while the FactSet consensus for both overall and U.S. same-store sales was for a decline of 3.6%.
For fiscal 2024, the company expects EPS growth of about 1%, while the current FactSet consensus of $15.57 implies 3.0% growth.
The company is expecting sales to increase 1% and same-store sales to be down 1%, while the FactSet consensus is for sales to grow 1.4% and same-store sales to slip 0.4%.
Separately, the company raised its quarterly dividend to $2.25 a share from $2.09 a share, with the new dividend payable March 21 to shareholders of record on March 7.
Based on Friday’s stock closing price of $362.35, the new annual dividend rate implies a dividend yield of 2.48%, which is well above the yield for shares of rival Lowe’s Companies Inc.
LOW,
of 1.94% and the implied yield for the S&P 500 index
SPX
of 1.43%.
Home Depot’s stock has rallied 17.6% over the past three months through Friday, while the Dow has advanced 9.9%.
