Home Depot Falls As Rising Costs Weigh on Margins

Shares of Home Depot (HD:US) closed sharply lower on Tuesday after the home improvement retailer reported a decline in comparable sales for its fourth quarter.

Home Depot said its comparable sales fell 0.3% in the holiday quarter while analysts were hoping for a 0.3% increase. Net sales came in at $35.83 billion, missing the consensus of $35.97 billion.

“Fiscal 2022 was another record year for The Home Depot as our team continued to successfully execute in a challenging and dynamic environment," said Ted Decker, Chairman, President, and CEO.

The customer transactions fell 6% year-over-year, in line with analysts’ expectations. The average ticket sales were $90.05, rising 5.8% YoY, worse than the expected 6.4% increase.

For the full year, HD said it expects its sales growth and comparable sales growth to be approximately flat compared to the previous year. This is the biggest driver of a move lower in HD shares as analysts were expecting full-year sales to increase by 2%. Moreover, the full-year operating margin is about 14.5%, below the consensus of 15.3%.

Home Depot also announced that its board approved a 10% increase in its quarterly dividend to $2.09 per share, which translates into an annual dividend of $8.36 per share.

Congress and Senate members, including Representatives Kevin Hern, Chris Jacobs, and Ro Khanna, were mostly selling HD shares in recent months. On the other hand, Congress members Kurt Schrader and Lloyd Doggett were buying shares in the final quarter of 2022.