Home Depot on Tuesday reported sales that missed analysts' expectations and lowered sales prospects for the year, fearing the trade war would curb consumer spending.
"Today, we are updating our sales guide to first and foremost account for continued timber price deflation, as well as potential consequences for the US consumer as a result of recently announced tariffs," CEO Craig Menear said in prepared remarks.
The company's shares rose below 1% in trading in the premarket following the news.
Here's what Home Depot reported for fiscal second quarter 201
- Earnings per share, adjusted: $ 3.17 versus $ 3.08 expected
- Revenue: $ 30.84 billion versus $ 30.99 billion expected  Sales of the same store: an increase of 3% versus 3.5% growth expected
Net income for the quarter ended August 4 was $ 3.48 billion dollars, or $ 3.17 per share, compared to $ 3.51 billion, or $ 3.05 per share, per year. since . It beat earnings expectations of $ 3.08 per share, based on Refinitive data.
Sales climbed 1.2% to $ 30.84 billion from $ 30.46 billion a year ago, not expected for $ 30.99 billion.
Sales at Home Depot stores opened at At least 12 months increased by 3% in total and increased by 3.1% in the US, short of expectations of growth of 3.5%.
The Atlanta-based company has previously warned about the tolls a decline in timber prices will take on its business. Wood load futures are about 16% since the high point in February, and wood load accounts for about 8% of Home Depot's total turnover. Home Depot in May said weak timber prices hurt sales growth of about $ 200 million in the first quarter. It added that if prices did not improve, it could hurt annual sales by as much as an additional $ 600 million.
At the height of Tuesday's mixed results, Home Depot now requests that fiscal sales in 2019 be up 2.3% and same-store sales increase by about 4%. Previously, it asked for a total sales growth of 3.3% and sales growth in the same store of 5%.
Earnings per share are still expected to grow by approximately 3.1% to $ 10.03 for the year.
Home Depot said the average shopper ticket grew 1.7% during the second quarter to $ 67.31 from $ 66.20 a year ago. It said sales per square foot increased 1.1% to $ 509.55 from $ 504.20 in fiscal 2018.
"We are encouraged by the momentum we see from our strategic investments and believe that the current health of the US the consumer and a stable housing environment continue to support our business, "added Menear.
Still, analysts are still concerned that Home Depot, along with competing Lowe's, is losing momentum in what appears to be a rockier residential environment in general.
"Existing home sales remain choppy; house prices are declining, and home renovation / repair activity is expected to slow further as we enter the back half of 2019 and into 2020," Gordon Haskett analyst Chuck Grom said in a note to clients earlier this week.  Home Depot shares, valued at $ 228.8 billion, are up more than 21% this year. Lowe's shares, valued at $ 74.5 billion, are about 3%.