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Home Depot (HD) investors hoping for a turnaround in the housing market may have to keep waiting.
The home improvement chain posted mixed earnings on Tuesday morning as consumers reconsider home renovation projects due to the Trump administration's tariffs. Revenue jumped 9.4% year over year to $39.86 billion, compared to the $39.29 billion Wall Street expected. Net earnings per share declined 3% to $3.56, missing the $3.59 expected.
Same-store sales fell 0.3%, compared to the 0.2% decrease expected. That's a reversal after same-store sales growth turned positive in Q4 following eight straight quarters of decline. The company said it was negatively impacted by foreign exchange rates by approximately 70 basis points.
CEO Ted Decker said the results "were in line with our expectations." The company saw softer demand in larger discretionary projects while shoppers engaged with smaller projects, he said in the earnings call. Sales to professionals outpaced DIY customers.
Shares edged up 1% in morning trading. Investors were "encouraged" by the "better than feared" same-store sales decline and reiterated full-year guidance, per TD Cowen's Max Rakhlenko.
Prior to Tuesday, Home Depot stock was down 2.5% year to date. Rival Lowe's (LOW) stock is down nearly 5% versus a 1% gain for the S&P 500 (^GSPC).
"We project it to take multiple quarters and into next year before the growth becomes more solid and flows through to earnings, as near-term macro pressures continue, particularly with uncertainty amidst new tariff policies," Telsey Advisory Group's Joe Feldman wrote in a note prior to earnings.
Read more about Home Depot's stock moves and today's market action.
Here's what Home Depot reported in its first quarter results, compared to what Wall Street expected, according to Bloomberg data:
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Revenue: $39.86 billion, versus $39.29 billion
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Adjusted earnings per share: $3.56, versus $3.59
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Same-store sales growth: -0.30%, versus -0.20%
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US same-store sales growth: +0.2%, versus -0.16%
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Transaction growth: +2.10%, versus +0.18%
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Average ticket size: +0.03%, versus -0.65%
Tariff uncertainty remains a top concern. The US temporarily dropped tariffs on Chinese imports from 145% to 30%, while so-called reciprocal tariffs have been suspended for a 10% universal duty. However, rates are still much higher than they were historically, and the changing tariff environment has tanked consumer sentiment.
Read more: What Trump's tariffs mean for the economy and your wallet
