Home Depot cuts annual sales forecast on slowing demand

Home Depot Inc (HD.N) cut its annual sales forecast on Tuesday and projected a steeper decline in profit than previously expected, as Americans cut back on spending on tools and building materials as inflation stays sticky.

Shares of the largest U.S. home improvement chain tumbled about 4% in premarket trading after the company also missed first-quarter sales estimates, hit by adverse weather and falling lumber prices. Shares in smaller rival Lowe’s Cos Inc (LOW.N) dropped 3%.

Home improvement retailers have now lost their pandemic-era sparkle, as consumers shift focus away from home renovations and spend on travel, vacations and other services. That drove a 4.8% drop in quarterly transactions at Home Depot.

Home Depot kicks off a big week for earnings from U.S. retailers on a gloomy note. Target Corp (TGT.N) and Walmart Inc (WMT.N) are scheduled to report on Wednesday and Thursday, respectively.

With weather in March being unusually wet and cold across many parts of the United States, customers also put off work on projects around their houses, further denting sales at a time when lumber prices have declined.

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