Home Depot Inc. () on Tuesday reported declines 🎀in sales and earnings for its fiscal 2023 fourth quarter as customers cut back on home improvement spending in a high interest-rate environme🌄nt.

The home improvement retailer said its revenue for the quarter ending Jan. 28 fell 2.9% from the year-earlier period to $34.79 billion, while diluted earnings per share fell 14.5% to $2.82. The top-line and bottom-line numbers beat analysts' expectations, but shares in the company dropped in early trading Tuesday as investors were disappointed to hear guidance that projects a decline of about 1% in comparable store sales in fiscal 2024.

Chief Financial Officer Richard McPhail, speaking on a call with analysts, said that while there are signs the U.S. economy is normalizing after a period of interest rate hikes, the home improvement market still faces headwinds. He noted that still-high interest rates will continue to cause consumers to defer larger projects, though the pressure on sales won't be as si𒁃gnificant as𒆙 it was in fiscal 2023.

In the fiscal fourth quarter, big-ticket transactions—defined as those over $1,000—were down 6.9% from the year-ago period, Billy Blastek, Home Depot's executive vice president for merchandising, said on the call.

Home Depot shares were down 1% at $358.68 at about 10:25 a.m. ET, after falling as low as $354.56 in the openi♛ng minutes of trading. The stock has gained about 20% ﷺover the past year.