Home Depot said Tuesday that the company is seeing slower growth in housing as concern about a cooling market grows.
“As we look to 2019, most housing metrics are trending positive, albeit trending toward stability,” Chief Financial Officer Carol Tome told analysts on the conference call.
Tome said that Home Depot expects the U.S. gross domestic product to grow by 2.6 percent during this year. The Fed, meanwhile, said in December that it is forecasting GDP growth of 2.3 percent.
Home Depot’s commentary on the domestic economy comes as pressure increases on home sales and prices. The Commerce Department said Tuesday that housing starts in December fell 11.2 percent, the slowest pace of construction in more than two years.
Shares of Home Depot dropped about 3 percent Tuesday morning after the company fell short on earnings and disappointed with its 2019 outlook. The company said that it expects to earn $10.03 per share this year, 23 cents less than analysts’ estimates. It is forecasting same-store sales growth of 5 percent in fiscal 2019 and revenue growth of 3.3 percent. In fiscal 2018, it reported same-store sales growth of 5.2 percent and revenue increased by 7.2 percent.
The company is also shifting its calendar for fiscal 2019. This year will include 52 weeks, compared to 53 in 2018.
Home Depot earned $2.09 per share during its fourth quarter, missing the $2.16 per share expected by analysts surveyed by Refinitiv. The company reported revenue of $26.49 billion, falling short of the $26.57 billion Wall Street was expecting.