By Allison Prang and Colin Kellaher 

Home Depot Inc. on Wednesday forecast same-store sales for the next fiscal year that were below Wall Street's expectations as the company waits to see investments in its supply chain, stores and digital offerings pay off.

For fiscal 2020, Home Depot said it expects total sales and comparable sales to rise by 3.5% to 4%. Analysts polled by FactSet, on average, were expecting same-store sales growth of 4.3%.

The Atlanta home-improvement retail giant has missed same-store sales expectations for the last four fiscal quarters, according to FactSet, and hasn't reported annual same-store sales below 4% since fiscal-year 2012.

Home Depot's disappointing outlook comes not long after the company lowered its sales expectations for the current fiscal year.

Home Depot is gaining market share, company executives said during an investor presentation Wednesday. The company's expectations for sales and earnings reflect slowing economic growth and a housing market that is "stable and growing, albeit at a more tempered pace than in recent years," a spokeswoman said.

The company has been working on revamping its supply chain to deliver products to customers faster.

Chief Executive Craig Menear had said on the company's earnings call in November that it was taking longer than expected for some of the company's strategic plans to show results.

In prepared remarks Wednesday, Mr. Menear expressed confidence in the company's plan, saying it would address customer needs.

One of the keys for Home Depot is whether the company can make investors confident that growth could improve in the next fiscal year, Credit Suisse said in a note Wednesday. Home Depot also needs to reassure investors that its investments will lead to growth and are on target, the analysts said.

"We did feel like a reset was needed here," Credit Suisse said, noting the company's guidance for the current fiscal year was "more aggressive."

The company said it still expects fiscal 2019 sales to rise about 1.8%, with comparable sales on a 52-week basis up about 3.5%. It also backed its full-year earnings forecast of $10.03 a share.

Shares were down 4% midday Wednesday.

Write to Allison Prang at allison.prang@wsj.com and Colin Kellaher at colin.kellaher@wsj.com

 

(END) Dow Jones Newswires

December 11, 2019 13:16 ET (18:16 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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