Also reporting earnings Tuesday morning was home-improvement retailer Home Depot (HD). The company announced that third-quarter earnings dropped 8.9% to 41 cents per share thanks to weak housing and home renovation markets. That was a nickel better than analysts' expectations.
Revenue dropped from a year ago as well, but the $16.36 billion in revenue was better than the expected $16.27 billion. The company also expects full-year earnings of $1.55 per share, which is better than the forecast $1.52 per share.
So, why did HD dip lower following the report? It seems that investors are a bit more concerned about the upcoming holiday season and a year-over-year drop in same-store sales. Moreover, the predicted full-year earnings of $1.55 per share are a full 13% lower than the results from last year.
What's more, the stock is struggling with overhead resistance in the $28.50 region. This region recently stifled HD's attempted run higher and, now that the stock has retreated to support at its 10-week moving average and reloaded, it appears that $28.50 will act as resistance again.
With year-over-year sales falling and low average checkout receipts, Home Depot could be in for a rough holiday season. A rough holiday season could then lead to a rough quarter ... it is a vicious cycle.
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