Home Depot says "the worst" of inflation is finished - but there is a catch
It can take some time to buyers to really feel the positive effects.
For more than two years now, Americans have been dealing with swollen prices, which can be particularly frustrating because we are forced to go out More for necessities . But even if you have the impression that there is no end in sight, Home Depot suggests the opposite. During a recent call for results, Richard McPhail , executive and financial director of Home Depot, said that "the worst" of inflation was in fact going to and disappeared. Read the rest to discover what the domiciliary renovation retailer had to say about the situation - and why you should always reveal your receipt.
The Home Depot numbers took a hit due to inflation.
Home Depot, like many other retailers, has experienced a sharp drop in discretionary expenses while buyers tighten their belts. But now the domiciliary renovation company seems more optimistic. AE0FCC31AE342FD3A1346EBB1F342FCB
For a November 14 profit call , McPhail said that "the most important observation" that society has made was that "the worst of the inflationary environment is behind us".
Billy BASTEK , Executive vice-president of Merchandising Home Depot, echoes this, telling investors that "the inflation environment seems to be behind us". As a result, McPhail and Bostick said the prices were "set".
Home Depot could also be on something, as government data revealed that Inflation was flat In October compared to the previous month, CNBC reported.
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Do not expect all prices to drop immediately.
You may be ready to make follies on this purchase of a device that you have pushed back, but be warned that the prices of "adjustment" do not automatically translate by lower prices.
"The retail prices set up on the market," said McPhail. "Some prices are installed at levels above 2022, others settle down. But we see stabilization."
In general, Ted Decker , The president, president and chief executive officer of Home Depot, said that Home Depot is committed to maintaining low prices - and that he will continue to organize events and sales for Black Friday and other events seasonal workers. However, the company withdraws promotions that do not make a significant difference in the margins.
"We prefer to be even less promotional than today," said Decker, using the example of a living room painting. According to Decker, the workforce (that is to say painters) is often the greatest expenditure for domiciliary renovation projects, so eliminating $ 10 for the paint does not really move the needle ".
Bastk added: "From the point of view of promotional activity, he really returned to early times ... Our price has certainly, as Ted mentioned, in recent months. The environment has certainly stabilized , therefore, you know, we operate in a very rational market and promotional environment, as I said, just like a return to pre-countryic times. "
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Less inflation is not beneficial for retailers right away.
According to CNBC, in the short term, the cooling of inflation is in fact to the sales figures for retailers - and for the third quarter, Home Depot reported a 3% decrease of sales And a 3.1% drop in comparable store sales, compared to the same period in 2022, according to a press release on November 14.
It is unlikely that the slowdown in inflation will have an immediate effect on the margins of Home Depot in this holiday season, as Michael baker , a detail analyst at D.A. Davidson, told CNBC.
"Less inflation can invite in certain discretionary expenses, but this is compensated by the fact that it is generally a fairly gentle expenditure environment," he said.
However, in the long term, when prices drop or simply stop increasing, this will leave buyers with additional money to spend where they want, according to CNBC.
The leaders called 2023 "a period of moderation".
During the call for profits, Decker said that 2023 was a "period of moderation for home improvement expenses" and added that the company was confident about the company and operations.
But even with inflation and confidence of cooling in their business model, Home Depot still provides for a loss for 2023. In the press release, the company reduced its annual prospects, providing that sales of comparable stores are located Between 3 and 4%, because opposed to between 2 and 5%.
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