By Kimberly Chin
Home Depot Inc. lowered its sales forecast as the company warned that rising material costs as well as the potential effects of tariffs on U.S. consumers could weigh on growth.
The home-improvement retailer said fiscal 2019 sales growth would increase by 2.3%, down from its previous guidance of 3.3%. Same-store sales are projected to grow by about 4%, 1 percentage point lower than its previous forecast. The company affirmed its earnings guidance.
Despite positive signs of a stable housing market, lumber-price deflation is expected to negatively affect sales growth, the company said.
Overall sales rose 1.2% for the quarter to $30.84 billion from a year ago. Analysts projected sales of $31 billion, according to FactSet.
The number of customer transactions was flat from a year ago while average ticket prices, or the amount of money customers spent per visit, rose 1.7%. Same-store sales -- a common metric in retail based on revenue at stores open at least one year -- rose 3%. Analysts expected a 3.3% rise.
Home Depot said second-quarters earnings were $3.48 billion, or $3.17 a share, down from $3.51 billion, or $3.05 a share, a year earlier, primarily due to higher expenses. Expenses rose 1.3% in the quarter. Analysts projected earnings of $3.09 a share.
Shares of Home Depot rose 0.8% premarket on low trading volumes.
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