By Dean Seal
Home Depot’s first-quarter sales fell more steeply than expected as lumber prices fell and demand in certain big-ticket home improvement categori-es weakened.
The home-improvement chain posted a profit of $3.87 billion, or $3.82 a share, down from $4.23 billion, or $4.09 a share, in the same quarter a year ago. Analysts polled by FactSet had been expecting $3.80 a share.
Sales were down 4.2% at $37.26 billion, below analyst forecasts for $38.31 billion, according to FactSet.
Comparable sales, which strip out the effects of store openings and closings, declined 4.5%, a steeper drop than the 1.6% decline analysts surveyed by FactSet had been expecting.
The Atlanta-based company said its top line was driven lower by lumber deflation and unfavorable weather conditions.
“We saw much colder and wetter conditions than expected, particularly in California and the Western U.S.,” Chief Financial Officer Richard McPhail said in an interview.
Mr. McPhail said demand for goods, which was elevated throughout the pandemic, is softening as shoppers spend more on services. Customers are also holding off on making big-ticket purchases that can be easily deferred and opting for smaller home improvement projects, he said.
Shares were down 4.5% at $275.49 in premarket trading.
Write to Dean Seal at dean.seal@wsj.com
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