Home Depot announced Tuesday that the company is giving its frontline workers a raise, saying it is dedicating $1 billion to boost compensation for hourly employees. The minimum starting pay at the home improvement giant is now $15 an hour.

In a message to all U.S. employees, Home Depot CEO Ted Decker said the higher wages went into effect on Feb. 6 and that some workers have already seen their raises reflected in their Feb. 17 paychecks. All other hourly workers can expect a larger paycheck starting Feb. 24.

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"Since 90 percent of our store leadership started as hourly associates, today’s new hires are our future leaders," Decker wrote. "This investment will help us attract and retain the best talent into our pipeline."

The announcement came the same day Home Depot reported its fourth quarter and fiscal 2022 results, posting a surprise drop in comparable sales for the quarter and forecasting annual profit below Wall Street expectations. The company warned of waning consumer demand for home improvement goods as inflation chews away at Americans' budgets.

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Home Depot follows fellow retail behemoth Walmart in hiking worker pay as companies scramble to hire and retain workers in the tight labor market.

Walmart also reported earnings Tuesday, joining Home Depot in forecasting full-year earnings below estimates. The retailer said it was cautious about the economic outlook for 2023 and warned consumers were likely to continue shopping for lower-priced items that could pressure its margins.

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FOX Business' Joe Toppe and Reuters contributed to this report.