The Home Depot has reported mixed results for the first quarter, which an analyst described as reasonable given the more challenging economy.

The company’s sales for the quarter ended rose 9.4 per cent to $39.9 billion, mainly underpinned by the boost from the SRS Distribution acquisition. 

Without this, the sales performance would be flat, reflecting the more challenging economy and softer demand for home improvement, according to GlobalData MD Neil Saunders.

“Disappointingly, after peeking into the black last quarter, comparable sales are back in negative territory with a 0.3 per cent decline. The good news here is that all of this was driven by unfavorable exchange rates which dragged down the contribution from international operations,” he continued.

In the US, comparable sales fell 0.2 per cent, which shows the home improvement market has reached the nadir of its decline after a very sluggish period, the analyst stated.

Saunders said the central problem for Home Depot is the skittish housing market, with home sales down 3.1 per cent during the quarter due to continued high interest rates and growing economic uncertainty. 

The number of projects undertaken by non-movers increased 0.4 per cent per cent thanks to the modest gains in small projects. Bigger ticket home improvement projects remain sluggish as consumer confidence and finances are still largely absent from the economy, he elaborated.

On the bottom line, net earnings edged down from $3.6 billion last year to $3.4 billion.

The company reaffirms its full-year guidance, expecting sales to grow 2.8 per cent and comparable sales to increase 1 per cent.

“Given the acquisition of SRS will annualize out during this fiscal, these numbers represent reasonable progress. However, 2025 will be a year of gentle uplifts, not one of full recovery,” Saunders concluded.