(Reuters) – Home Depot Inc reported its slowest growth in quarterly same-store sales in at least three years on Tuesday, missing Wall Street estimates, as the home improvement chain was hurt by wet weather in February and a steep fall in lumber prices.
Sector analysts have said that unusually cold and wet weather in several U.S. states, which delayed the onset of spring and kept many Americans indoors, were likely to have hurt first-quarter sales of Home Depot’s gardening-related products.
While the unfavorable weather has led contractors to delay housing projects and prevented do-it-yourself customers from working outdoors, land and labor shortages have also hurt lumber demand.
In its first quarter results release, the company said only that bad weather in February had depressed results. It was due to hold a call with analysts later on Tuesday.
“We were pleased with the underlying performance of the core business despite unfavorable weather in February and significant deflation in lumber prices compared to a year ago,” Chief Executive Officer Craig Menear said in the results statement.
Lumber futures have fallen 28.6% since their 2019 highs in early February. The commodity made up nearly 8% of Home Depot’s sales in the last fiscal year.
Same-store sales at the home improvement chain rose 2.5% in the quarter ended May 5 and missed expectations of a 4.2% increase, according to IBES data from Refinitiv.
The company’s net income rose to $2.51 billion, or $2.27 per share, from $2.4 billion, or $2.08 per share, a year earlier.
Analysts were expecting earnings of $2.18 per share.
Net sales rose 5.7% to $26.38 billion, beating analyst average estimate of $26.36 billion.
The company’s shares were marginally lower in pre-market trading.
(Reporting by Uday Sampath in Bengaluru; Editing by Arun Koyyur)