Home Depot CEO breaks silence after shoppers ‘abandon’ chain despite big changes – and bosses say climate is to blame

EMPLOYEES at a major retailer have blamed the weather for weak sales in the fiscal first quarter of the year.

Home Depot released its results on Tuesday, which showed poor performance compared to the same period last year.

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The retailer reported sales of $36.4 billion in the first quarter of fiscal 2024, which represents a 2.3% drop from the same quarter in 2023, according to a Press release.

The results indicated that comparable sales in the last quarter decreased by 2.8% and U.S. comparable sales decreased by 3.2%.

This was the sixth consecutive quarter that comparable sales fell as shoppers made fewer trips to the retailer during the first quarter, for CNBC Report.

The news outlet noted that when shoppers visited Home Depot last quarter, whether online or in-store, they spent less money.

However, Ted Decker, chairman, president and CEO, believes climate is largely behind the latest results.

“The quarter was impacted by a delayed spring start and continued weakness in certain larger discretionary projects,” he said in a statement.

However, Decker praised employees as the company “continues to increase market share.”

“We feel very good about our store availability, our product assortment in stores and online, and our engagement with associates,” said the CEO.

“Our associates are energized and ready to serve our spring break customers across the country.

“I would like to thank them for their continued hard work and dedication to serving our customers and communities.”

Home Depot Chief Financial Officer Richard McPhail supported this view when discussing the results with CNBC.

He recalled that spring is the most important season for the company and that as the weather improved, sales also improved.

‘PRENTRED DEMAND’

However, he also expects changes in mortgage interest rates, which he believes will increase sales.

With current rates on the rise, McPhail says homeowners are putting off any moves or home moves.

The quarter was impacted by a delay in the spring start.

Ted DeckerCEO of HomeDepot

“The home improvement client is extremely financially healthy,” he said.

“And so it’s not a case of not having the ability to spend.

“What they tell us is that they are simply delaying these projects because, due to higher rates, it just doesn’t seem like the right time to do them.”

The CFO noted that when mortgage rates have previously decreased, even slightly, there is a noticeable shift in housing turnover in a “positive direction.”

“So we think it’s an indicator that there is a huge pent-up demand for household formation and housing rotation and the larger projects that are associated with housing rotation,” he added.

NEW CHANGES

As the retailer tries to manage weak sales, it focuses more heavily on professionals who tend to buy in bulk and supply steady customers.

Under this growing focus, Home Depot is expanding its network of distribution centers that can deliver directly to job sites for carpenters and other jobs.

However, it also remains focused on its large home DIY customer base, building new stores and improving the shopper experience with new technology.

Despite the quarterly results, the company’s overall outlook for 2024 remains unchanged.

According to the retailer, it expects total sales to increase by about 1% throughout the year, which includes an additional week from 2023.

However, comparable sales are expected to fall 1% excluding the additional days in 2023.

The US Sun has reached out to Home Depot for comment.