Home Depot Inc warned of slowing demand for home improvement goods this year as inflation dents the ability of customers to spend on remodeling projects, sending its shares down as much as 6%.
The No. 1 U.S. home improvement chain forecast annual profit below Street expectations as it increases spending on wages by $1 billion to tackle labor shortages while struggling with higher costs.
Home Depot said demand for its products such as soft flooring and roofing slowed, even as builders and contractors continued to purchase its big-ticket items such as pipes and fittings.
The company expects 2023 per-share profit to decline in the mid-single digits percentage range, while analysts expected a 0.4% increase to $16.72, according to Refinitiv data.
Rising wages and a weak consumer sentiment also led retail bellwether Walmart Inc to take a cautious stance for 2023 as it forecast annual profit below estimates on Tuesday.
Home Depot also reported a surprise drop in fourth-quarter comparable sales as customer transactions fell.
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