Home Depot sales continue to slide with Americans wrestle with inflation and it narrowed its outlook for the year. But the nation's biggest home improvement retailer topped expectations for the quarter. 

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Third-quarter revenue slipped 3% to $37.71 billion, Home Depot Inc. said Tuesday, which is better than the $37.52 billion that analysts surveyed by Zacks Investment Research predicted.

Sales at stores open at least a year, a key gauge of a retailer's health, dropped 3.1%. In the U.S., they declined 3.5%.Customers were focused on smaller, less expensive projects.

“Similar to the second quarter, we saw continued customer engagement with smaller projects, and experienced pressure in certain big-ticket, discretionary categories," Chair and CEO Ted Decker said in a prepared statement.

Home Depot earned $3.81 billion, or $3.81 per share, in the quarter. 

A year earlier, the Atlanta-based company earned $4.34 billion, or $4.24 per share.

This topped the earnings of $3.76 per share that Wall Street expected.

Shares rose slightly before the market open.

Home Depot now expects a earnings per share to decline between 9% and 11% in 2023 and same store sales to fall 3% to 4%.

The company previously anticipated an earnings per share drop between 7% and 13% and a same-store sales decline of 2% to 5%.