Home Depot Inc. on Aug. 20 reported second quarter EPS that beat analysts' estimates but cut its sales guidance for fiscal 2019 due to lumber price deflation and the potential impact of tariffs.
For the three months ended Aug. 4, Home Depot said diluted EPS was $3.17, up 3.9% from $3.05 in the year-ago period and ahead of the S&P Global Market Intelligence mean consensus estimate for normalized EPS of $3.08.
Net earnings slipped 0.8% to $3.48 billion from $3.51 billion.
The home improvements retailer maintained its outlook for full-year diluted EPS growth of about 3.1% to $10.03. However, it reduced its sales growth forecast to 2.3%, or 4% on a comparable basis, from 3.3%, or 5% on a comparable basis. The company cited declining lumber prices as well as "potential impacts to the U.S. consumer arising from recently announced tariffs" for the reduced outlook.
Second quarter sales grew 1.2% year over year to $30.84 billion from $30.46 billion, while comparable sales grew 3%. The company said the main reason for the difference between sales and comparable sales performance was an extra week of trading in fiscal 2018.
Operating income was flat at $4.90 billion.
"We were pleased with our results as we delivered accelerating comp performance throughout the quarter," said Craig Menear, chairman, CEO and president. "We are encouraged by the momentum we are seeing from our strategic investments and believe that the current health of the U.S. consumer and a stable housing environment continue to support our business."
In premarket trading, Home Depot shares were up 0.5%, or $1.05, at $209.
