(Reuters) – Home Depot cut its annual forecast for profit and comparable sales on Tuesday as hopes for a recovery in demand for home improvement projects faded due to rising borrowing costs.
Rising mortgage rates and home prices have dampened demand and discouraged customers from investing in major renovation projects.
Home Depot now expects its annual comparable sales to fall 3% to 4%, compared with a decline of about 1% previously.
“During the quarter, higher interest rates and greater macroeconomic uncertainty put broader pressure on consumer demand, leading to lower spending,” Chief Executive Officer Ted Decker said.
Comparable sales fell 3.3%, well above analysts’ expectations of a 1.98% decline, according to LSEG data, while customer transactions recorded a 13th consecutive quarterly decline, at 1.8%.
Home Depot, however, raised its total sales forecast to between 2.5% and 3.5% and said it expected SRS to contribute about $6.4 billion.
The title was up 0.60% on Wall Street at 2:50 p.m. GMT.
(Written by Juveria Tabassum in Bangalore, Leo Marchandon, edited by Kate Entringer)
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