Home Depot Warns of Weak 2023 Profit as Rising Prices Hurt Demand

Home Depot Inc. forecast annual profit below Wall Street expectations on Tuesday as soaring prices weigh on demand for home improvement products, while it grapples with higher costs and labor shortages.
The No. 1 U.S. home improvement chain posted a surprise drop in fourth-quarter comparable sales, sending its shares down about 4 percent in premarket trading. Shares of smaller rival Lowe’s Cos Inc. also slipped.
Following an exponential surge in remodeling activity during the pandemic, demand for home improvement tools such as paint and flooring is now cooling as consumers cut back spending, setting the company up for a challenging 2023.
“The macro environment seemingly has caught up with Home Depot,” said D.A. Davidson analyst Michael Baker as it now braces for the impact of higher borrowing costs and declining home prices….