Middle-class shoppers are pulling back, sending alarms through the retail industry: 'There are signs of real distress on the way'

Core Insights - Home Depot has cut its full-year outlook due to a slowdown in consumer spending, with comparable sales rising only 0.2%, and US comps up by 0.1%, falling short of Wall Street expectations [1][3][7] - The company is experiencing a decline in demand as middle-class shoppers are becoming more cautious, influenced by high borrowing costs and a sluggish housing market [3][4] - External factors such as milder weather and a lack of storms have negatively impacted sales of seasonal products, further contributing to the decline in home improvement demand [4][5] Group 1: Company Performance - Home Depot reported weakening sales growth for Q3, with a significant drop in expected demand [2][3] - The company had anticipated better results due to easing interest rates, but this did not materialize [3][4] - The decline in home improvement projects is estimated at 0.8% from the previous year, particularly affecting big-ticket remodels that require financing [5] Group 2: Industry Trends - The slowdown in consumer spending is part of a broader trend affecting the retail sector, with many retailers facing similar challenges [6][8] - Analysts indicate that the consumer backdrop is deteriorating quickly, moving from "soft to softer" as winter approaches [4][7] - Uneasy consumers are shifting their spending towards travel and leisure rather than home upgrades, impacting overall demand in the home improvement sector [5][6]