08:50 AM EDT, 08/13/2024 (MT Newswires) -- Home Depot ( HD ) slashed its full-year earnings and comparable sales outlooks on Tuesday as macroeconomic headwinds weigh on consumer demand, even though the company logged better-than-expected top and bottom line results in its fiscal second quarter.

The home-improvement retailer anticipates a fiscal 2024 decrease in earnings per share of between 2% and 4%, compared with the previous guidance for growth of about 1%. Adjusted earnings are seen declining 1% to 3%. The consensus on Capital IQ is for both normalized and GAAP EPS of $15.15.

Comparable sales are pegged to drop by 3% to 4% versus the company's prior projection for a roughly 1% decrease. The Street currently estimates a 1.6% decline. The low end of the outlook implies consumer demand consistent with the first half, while the top end reflects incremental pressure, according to the retailer.

"While we remain bullish on (Home Depot's ( HD )) medium/longer-term growth potential and think rate cuts should boost the stock's multiple, fundamentals are softer than we would have previously anticipated at this stage; making the near-term set up difficult to assess," Truist Securities said in a client note. The brokerage has a buy rating on the retailer's stock with a price target of $396.

Home Depot ( HD ) now expects overall sales to grow between 2.5% and 3.5% for fiscal 2024, up from its previous guidance for an approximately 1% rise. Analysts are looking for $154.5 billion in revenue.

For the three-month period ended July 28, adjusted EPS ticked down to $4.67 from $4.68 the year before, topping the Street's view for $4.55. Sales edged 0.6% higher to $43.18 billion, including $1.3 billion from its recent acquisition of building-products supplier SRS Distribution. The market expected $42.71 billion.

"The underlying long-term fundamentals supporting home improvement demand are strong," Chief Executive Ted Decker said in a statement. "During the quarter, higher interest rates and greater macroeconomic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects."

Comparable sales slipped 3.3% at the company level, more than the 2.2% decrease modeled by analysts. The measure slid 3.6% in the US. The number of transactions moved down 1.8% to 451 million. The average ticket prices declined 1.3% to $88.90, while sales per retail square foot dropped 3.6%.

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