Stocks opened lower on Tuesday and sank during the session. The Dow Jones Industrial Average (DJINDICES:^DJI) snapped an eight-day winning streak, and the S&P 500 (SNPINDEX:^GSPC) also lost ground.

Today's stock market

Index Percentage Change Point Change
Dow (0.78%) (193.00)
S&P 500 (0.68%) (18.68)

Data source: Yahoo! Finance.

Heathcare was the weakest sector, with the Health Care Select Sector SPDR ETF (NYSEMKT:XLV) losing 1.3%. Regional banks were a rare bright spot, thanks to rising interest rates; the SPDR S&P Regional Banking ETF (NYSEMKT:KRE) added 0.7%.

As for individual stocks, Home Depot (NYSE:HD) slipped on a sales miss and AZZ (NYSE:AZZ) finally closed the books on a tough year.

Wall Street sign.

Image source: Getty Images.

Weather holds back Home Depot sales

Home Depot reported first-quarter sales that missed expectations, but profits that beat estimates, and shares fell 1.6%. Revenue grew 4.4% to $24.9 billion, slightly below the consensus analyst estimate of $25.2 billion. Earnings per share increased 24.6% to $2.08, $0.02 above expectations.

Comparable-store sales grew 4.2%, jumping 3.9% in the U.S. Company officials attributed the sales miss to unusually cold weather in April delaying sales in the garden department, which had negative comps and usually provides 15% to 20% of sales in Q1. If garden department sales are backed out, comparable-store sales growth would have been 6.5%, with double-digit comps growth in appliances, electrical, and lumber. 

The company reaffirmed guidance given last quarter, adjusting only for an accounting change, of 6.7% sales growth, a 5% increase in comparable sales, and a 28% jump in EPS for fiscal 2018.

"We are pleased by the strength of our business despite a slow start to the spring selling season," said CEO Craig Menear in the press release. "Outside of our seasonal business, we had solid results in all markets and categories and are seeing strong momentum in all lines of business during these first few weeks of May."

The stock opened down 2.6% on the sales miss, but recovered during the day. After considering its history of strong performance, investors seemed to take the temporary setback in stride.

AZZ reports delayed results that disappoint

Shares of AZZ tumbled 12.2% after the maker of galvanized steel and products for the generation and distribution of electrical power released results from its fiscal 2018 third and fourth quarters that had been delayed due to an accounting issue. For the full year, revenue fell 6.2% to $810.4 million and adjusted earnings per share plunged 42.6% to $1.35.

In early January, AZZ announced it that a review of accounting methodology would delay results, and on March 29, the company reported that it had determined that it should have used the percentage-of-completion method of accounting, and that results back to 2015 would be restated. The stock has lost 22% of its value since the start of the year.

Besides the accounting problem, AZZ faced a number of obstacles in fiscal 2018. "Although Fiscal 2018 was our 31st consecutive year of profitability, we faced challenges on several fronts," said CEO Tom Ferguson in the press release. "We encountered cyclical headwinds in demand, commodity input pricing and a secular downturn in the domestic nuclear business that had a direct impact on our top- and bottom-line performance."

The company actually gave strong guidance for the current fiscal year. It expects to earn between $1.75 and $2.75, which at the midpoint would be a 66.7% increase over fiscal 2018. Revenue guidance is $900 million to $960 million, well above the $885 million analysts are expecting. AZZ is probably happy to finally put the last fiscal year in the rearview mirror, and if it can deliver on its optimistic outlook, shareholders may finally get some relief.

Jim Crumly has no position in any of the stocks mentioned. The Motley Fool has the following options: short May 2018 $175 calls on Home Depot and long January 2020 $110 calls on Home Depot. The Motley Fool recommends Azz and Home Depot. The Motley Fool has a disclosure policy.