Third-quarter comparable sales rose just .2%, far below Bloomberg Consensus estimates of 1.36%. The retailer warned about weak consumer demand as elevated interest rates discourage home buying and remodeling. As a result, consumers are opting for smaller projects rather than upgrading their patios or building new decks. 

Snapshot of the third quarter with Bloomberg Consensus estimates:

    Comparable sales: +0.2% (miss; est. +1.36%)

       •  U.S. comps: +0.1% (miss; est. +1.25%)

    Total net sales: $41.35 bn (+2.8% y/y) — modest beat (est. $40.97 bn)

       •    Includes ~$900 m from recent GMS acquisition

    Adjusted EPS: $3.74 (miss; est. $3.84; down from $3.78 y/y)

    Average ticket: +1.8% (beat est. +1.1% implied)

    Other notables:

       •    Inventories higher than expected ($26.2 bn vs est. $25.0 bn)

      •     SG&A expenses up 5.9% y/y, above estimates

    Management commentary:

      •     Miss driven mainly by the absence of storm/hurricane activity (hurt disaster-recovery categories) and failure of anticipated sequential demand improvement to appear

       •    Ongoing headwinds: consumer uncertainty + continued pressure on the housing market, disproportionately hurting big-ticket home-improvement spending