Home Depot cut its sales expectations for the year as lumber prices slide and the company braces for potential damage from tariffs in the U.S. trade war with China.
The Trump administration delayed most of the tariffs it planned to impose on Chinese goods last week and dropped others altogether, responding to pressure from businesses and growing fears that a trade war is threatening the U.S. economy.
Lumber prices are falling because of weakness on the home construction. The Commerce Department said Friday that the pace of U.S. home construction fell a sharp 4% in July. So far this year, housing starts have declined 3.1%.
The Home Depot Inc. now anticipates 2019 sales to increase about 2.3%, down from its prior expectations of a 3.3% rise. The chain still expects annual per-share earnings to climb approximately 3.1% from last year, to $10.03.
For the three months ended Aug. 4, Home Depot earned $3.48 billion, or $3.17 per share. That's a dime better than Wall Street had expected and better than last year's $3.51 billion, or $3.05 per share.
Revenue rose to $30.84 billion, from $30.46 billion. Wall Street was calling for $31 billion.
Sales at stores open at least a year, a key gauge of a retailer's health, increased 3%. In the U.S., those sales were up 3.1%.