Home Depot reported flat third-quarter profit that missed Wall Street estimates and sharply cut its forecast for earnings and sales growth this year as the U.S. housing slowdown crimps spending.
Earnings came to $1.5 billion, or 73 cents a share, in the third quarter that ended Oct. 29, compared with $1.5 billion, or 72 cents, a year earlier.
Analysts, on average, expected profit of 75 cents, according to Reuters Estimates.
Total sales rose 11.3 percent to $23.1 billion, falling short of analysts' average estimate of $23.3 billion. Sales at stores open at least a year, an important retail measure, fell 5.1 percent.
In a statement, Home Depot said a slowing U.S. economy, declining home sales and prices, and fewer refinancings had hurt its retail division, where total sales rose just 1.1 percent to $19.7 billion.
In the Home Depot Supply segment that caters to homebuilders and other contractors, sales more than doubled to $3.5 billion, helped by acquisitions.
Atlanta-based Home Depot and rival Lowe's (Charts) have cut their outlooks this year as higher borrowing costs and weaker U.S. home sales led consumers to back away from big-ticket purchases.
Home Depot sharply pared its growth forecast, saying it now expects per-share profit to rise 4 to 5 percent for the current fiscal year, while sales would increase about 12 percent.
In August, Home Depot had said full-year results would come in at the low end of projections of 10- to 14-percent increase in per-share earnings and a rise of 14 to 17 percent in sales.
Home Depot (Charts) shares fell 24 cents to $36.40 in Monday trading, while Lowe's shed 17 cents to $29. Home Depot's stock has fallen about 11 percent this year, while Lowe's is off 13 percent.
Adding to the negative retail sentiment was Tuesday's report by Wal-Mart Stores (Charts) that it is lowering its fourth-quarter forecast. No. 2 general retailer Target (Charts) and No. 1 office supply retailer Staples are also slated to report before the market's open. Both are expected to report narrow gains in earnings.