© Reuters. FILE PHOTO: The logo of Home Depot is seen in Encinitas, California April 4, 2016. REUTERS/Mike Blake/File Photo
(Reuters) -Home Depot Inc cut its annual sales forecast on Tuesday and projected a steeper decline in profit than previously expected, as Americans cut back on spending on tools and building materials as inflation stays sticky.
Shares of the largest U.S. home improvement chain tumbled about 4% in premarket trading after the company also missed first-quarter sales estimates, hit by adverse weather and falling lumber prices. Shares in smaller rival Lowe’s (NYSE:) Cos Inc dropped 3%.
Home improvement retailers have now lost their pandemic-era sparkle, as consumers shift focus away from home renovations and spend on travel, vacations and other services. That drove a 4.8% drop in quarterly transactions at Home Depot (NYSE:).
Home Depot kicks off a big week for earnings from U.S. retailers on a gloomy note. Target Corp (NYSE:) and Walmart (NYSE:) Inc are scheduled to report on Wednesday and Thursday, respectively.
With weather in March being unusually wet and cold across many parts of the United States, customers also put off work on projects around their houses, further denting sales at a time when lumber prices have declined.
Home Depot finance chief Richard McPhail said demand was softening even further compared to the company’s expectations.
The company now expects comparable sales to decline between 2% and 5% in fiscal 2023, compared to its prior outlook for sales to remain nearly flat.
Analysts were expecting comparable sales to decline 0.9% this year, according to Refinitiv IBES data.
The company forecast earnings per share to decline between 7% and 13%, compared to prior expectations for a mid-single digits decline.
Home Depot’s first-quarter comparable sales decreased 4.5%, missing estimates of a 1.74% drop.
The company posted a profit of $3.82 per share, above estimates of $3.80.
This story originally appeared on Investing