What's going on?

American home improvement retailer Home Depot (HD) creaked ominously on Tuesday, reporting weaker-than-expected second-quarter sales growth and lowering its forecast for this year�s total.

What does this mean?

2019 has left Home Depot looking a little ramshackle. In the first quarter, unfavorable weather across the US wore away its sales, and last quarter, the amount it could charge for flooring products collapsed under falling lumber prices. That might be why the company�s sales in existing stores grew less than investors anticipated.


Home Depot now expects its annual revenue to increase by 2.3%, rather than its earlier estimate of 3.3%. But the company is still predicting its annual profit will grow by 3%. Perhaps it plans to spend the rest of the year clearing away some corporate debris.

Why should I care?

For markets: Papering over the cracks.

Since Home Depot�s quarterly profit actually beat predictions � and its annual profit forecast didn�t change � investors seemed comfortable buying up its stock, which rose 5%. They�d be wise to keep up with future industry updates, though, after private construction projects fell to an 18-month low in June, and new home-building slowed last month. They�ll be hoping July�s home sales data on Wednesday offers positive signs for customer demand. Investors in department store chain Kohl�s (KSS) were looking for similar clues on Tuesday: its revenue growth also fell short of forecasts, and its shares � despite a higher quarterly profit and reaffirmed annual target � fell 5%.

Zooming out: Rolling out the welcome mat.

At this late stage of an economic cycle, investors typically buy shares in providers of �essentials� � like utilities and consumer staples � rather than those focused on retail or leisure (tweet this). But this week a Hong Kong-based investment fund agreed to buy Greene King (GNK), the UK�s largest listed pub chain, for almost $6 billion � following in the footsteps of a private equity firm that bought the UK�s biggest private pub operator for $4 billion last month.