A Home Depot store in Livermore, California, US, on Thursday, May 12, 2022. Home Depot Inc. is scheduled to release earnings figures on May 17. Photographer:David Paul Morris | Bloomberg | Getty ImagesJust an awful earnings report from the stock market’s most important retailer on Tuesday: Home Depot.Bottom line – the broader-market implications of Tuesday morning’s post-earnings stock move for Home Depot are going to be significant. related investing news 42 minutes ago 7 days agoHome Depot tumbled more than 5%, or $13 a share, in premarket trading, which was worth about 100 points on the Dow Jones Industrial Average. It was taking a big bite out of the S&P 500, too. Once trading opened, the stock recovered some of its gains, and was recently down about 1.5%, still big enough to shave about 30 points off the Dow. Remember, it’s the most impactful retailer in the price-weighted Dow – having almost double the weight of Walmart (since it is almost double the price). And despite Walmart’s much larger market cap, Home Depot has both a greater index and earnings influence in the S&P 500 due to the Walton family’s hefty stake in Walmart that reduces its weighting in the main equity benchmark. Lowe’s is down 1.5% in sympathy, but it won’t report results until next Tuesday.Stock Chart IconStock chart icon Home Depot, 1 dayHome Depot’s EPS beat by 2 cents as a 3.9% reduction in SG&A costs helped a little. However, it is still the retailer’s first earnings decline since May 2020 (i.e., since the start of the Covid pandemic).But the real story is the demand destruction – as indicated by the company’s huge revenue miss. Sales were 2.7% below Wall Street’s expectations ($37.26B vs. $38.28B est. from Refinitiv) – its biggest revenue miss since November 2002. It is also the second straight revenue miss for the home improvement retailer – which follows 12 straight revenue beats. It’s also the biggest revenue drop since the financial crisis (revenue down 4.2% YOY in the latest quarter). Comps came in down 4.5% vs. down 1.6% consensus estimate (StreetAccount), with transactions falling 4.8% and average ticket basically flat (slightly positive).Pretty darn ugly.Stock Chart IconStock chart icon Home Depot, YTDSo what’s hurting demand? A number of factors. In Q1 – extreme weather in California hurt. But problems stretch beyond the weather. There’s also lumber deflation. But most importantly, as CEO Ted Decker flagged, “We also observed more broad-based pressure across the business compared to when we reported fourth quarter results a few months ago.”The company has cut its FY EPS and revenue growth projections due to the weak Q1 as well as “further softening o …
