US-based home improvement retailer The Home Depot reported a gross profit of $12.55bn in the first quarter (Q1) of fiscal year (FY) 2023, down 4.5% from $13.14bn in Q1 FY22.

The retailer’s sales also declined by 4.2% to $37.3bn in Q1 and its comparable sales for the quarter declined by 4.5%. Comparable sales in the US also decreased by 4.6%.

During the quarter, The Home Depot registered net earnings of $3.9bn, down 8.5% from $4.2bn in Q1 FY22.

Its earnings per diluted share were $3.82 in Q1 FY23 against $4.09 in the same quarter the prior FY.

The retailer’s operating income over the quarter was $5.55bn, a decline of 6.4% from $5.92 in Q1 FY22.

The Home Depot chair, president and CEO Ted Decker said: “After a three-year period of unprecedented growth for our sector, during which we grew sales by over $47bn, we expected that fiscal 2023 would be a year of moderation for the home improvement market.

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“Our sales for the quarter were below our expectations primarily driven by lumber deflation and unfavourable weather, particularly in our Western division as extreme weather in California disproportionately impacted our results.”

For 2023, The Home Depot expects sales and comparable sales to decline between 2% and 5% against the prior FY.

It also expects the operating margin rate to be between 14.3% and 14.0%.

Decker added: “Despite a more challenging environment, our associates maintained their relentless focus on our customers and I would like to thank them and our many partners for their hard work and dedication.

“While the near-term environment is uncertain, we remain very positive on the medium-to-long term outlook for home improvement and our ability to grow share in a large and fragmented market.”