House Depot on Tuesday posted a roughly 4% quarterly gross sales decline, as a sluggish actual property market and selective spending by householders continued to weigh on dwelling enchancment demand.
The corporate additionally caught by the present fiscal 12 months forecast that it shared in December at an investor day. It mentioned it expects full-year complete gross sales progress to vary between about 2.5% and 4.5% and adjusted earnings per share to be between roughly flat and up 4% from $14.69 within the prior fiscal 12 months. It expects full-year comparable gross sales progress, which takes out one-time elements like retailer openings and closures, to vary from flat to up 2%.
Regardless of the fiscal fourth-quarter gross sales decline, House Depot topped Wall Road’s income and earnings expectations for that interval.
In an interview with CNBC, Chief Monetary Officer Richard McPhail mentioned U.S. shoppers and the corporate have “been in a frozen housing atmosphere for 3 years” – and there hasn’t been a significant thaw.
“What we have seen as an added stress over the past 12 months has been this enhance in client uncertainty, a gradual decline in client confidence,” he mentioned. “And so these are indicators we’re watching.”
He mentioned prospects have informed the corporate that they’re involved about housing affordability and job losses, dynamics that coloured House Depot’s outlook for the 12 months.
Here is what House Depot reported for the fiscal fourth quarter of 2025 in contrast with Wall Road’s estimates, in response to a survey of analysts by LSEG:
- Earnings per share: $2.72 adjusted vs. $2.54 anticipated
- Income: $38.20 billion vs. $38.12 billion anticipated
Shares of House Depot rose about 2% on Tuesday, as the corporate beat earnings expectations after lacking estimates three quarters in a row. Its inventory closed at $384.48, bringing its market cap to $382.75 billion.
Increased rates of interest, decrease housing turnover and financial uncertainty have challenged the corporate, as householders delay the pricier initiatives sometimes spurred by shopping for or promoting a house.
Within the three-month interval that ended Feb. 1, House Depot’s web revenue fell to $2.57 billion, or $2.58 per share, from $3.0 billion, or $3.02 per share, within the year-ago interval. Excluding accounting-related bills associated to the worth of SRS Distribution and its subsidiaries, House Depot posted adjusted earnings per share of $2.72.
Income dropped from $39.70 billion within the year-ago interval. The corporate mentioned some decline was because of the most up-to-date fiscal 12 months 2025 having one fewer week. The extra week within the 2024 fiscal 12 months contributed $2.5 billion in gross sales.
Because the Atlanta-based retailer waits for enterprise to select up, it laid off 800 workers and introduced a five-day every week return-to-office coverage in late January.
But some traders anticipate an inflection level could possibly be coming for House Depot, as mortgage charges reasonable barely. The common charge on a 30-year fastened mortgage fell to five.99% on Monday, matching its lowest degree since 2022, in response to Mortgage Information Every day.
House Depot’s greatest promoting season, springtime, can be forward.
McPhail mentioned House Depot’s enterprise was comparatively secure all year long, together with within the fourth quarter, when adjusting for storms. He mentioned the corporate is gaining market share, even because the sector lags.
Comparable gross sales, an business metric additionally referred to as same-store gross sales, elevated 0.4% within the fiscal fourth quarter throughout the enterprise and 0.3% within the U.S.
Retailer transactions within the quarter throughout House Depot’s web site and shops dropped by 1.6% 12 months over 12 months, however common ticket rose 2.4% 12 months over 12 months.
Pricing and tariff tendencies
The expansion in common ticket “primarily displays some worth will increase,” Billy Bastek, government vice chairman of merchandising, mentioned on the corporate’s earnings name.
McPhail informed CNBC that House Depot has had “modest” worth will increase, although he declined to say which objects and classes now value prospects extra.
Half of House Depot’s 16 merchandising departments posted constructive comparable gross sales from the year-ago interval, Bastek mentioned. These had been energy, electrical, storage, indoor backyard, {hardware}, plumbing, bathtub and kitchen.
Huge-ticket purchases, which the corporate defines as these over $1,000, had been 1.3% larger than the year-ago interval, due to prospects buying and selling up for brand spanking new and modern objects and shopping for higher-priced merchandise, Bastek mentioned.
Even with these pricier purchases, there are indicators that some prospects are value-conscious. Bastek mentioned some prospects are buying and selling right down to lower-priced counter tops and home equipment, although that conduct hasn’t been widespread.
As U.S. shoppers delay promoting and shopping for properties, CEO Ted Decker mentioned “there’s possibly a bit extra restore than exchange.”
“We’re actually bouncing alongside what we hope could be a backside in issues like [housing] turnover,” he mentioned.
Increased tariffs have been one of many forces driving worth hikes at retailers, together with House Depot. Firms now face a brand new panorama for import duties after the Supreme Courtroom on Friday dominated that among the Trump administration’s tariffs had been unlawful. Quickly after the ruling, President Donald Trump mentioned at a information convention that he would pursue various tariffs and proposed an across-the-board world tariff that he has since set at 15%.
Decker mentioned House Depot is “nonetheless in the course of our evaluation” after the Supreme Courtroom ruling and newest proposed tariffs.
“Not all the knowledge is out proper now. Not all of the language is closing round what was introduced,” he mentioned. He added that House Depot is “as nicely positioned as anybody to know any impacts and handle by means of them.”
Greater than half of what House Depot sells comes from the U.S., in response to the corporate. It is diversifying its imports, in order that no single nation outdoors of the U.S. represents greater than 10% of the corporate’s purchases, McPhail mentioned.
Although do-it-yourself patrons have reduce, the corporate nonetheless has a extra secure enterprise section.
A rising enterprise from dwelling professionals, corresponding to contractors and roofers, has boosted House Depot’s general enterprise. It acquired SRS Distribution, an organization that sells provides to roofing, landscaping and pool professionals, for $18.25 billion in 2024 and purchased GMS, a specialty constructing merchandise distributor, for about $4.3 billion final 12 months.
Professional enterprise is robust, however nonetheless pressured
Professional gross sales had been stronger than do-it-yourself gross sales in the course of the fourth quarter, McPhail informed CNBC, although he declined to share particular figures.
Even the professional facet of the enterprise has been pressured. McPhail mentioned on the corporate’s earnings name that SRS’ gross sales declined by a low single-digit proportion within the fourth quarter in contrast with the year-ago interval.
But he added the corporate — which sells provides to roofers and different professionals — fared higher than others. He referred to market analysis knowledge for the business, which confirmed that complete shipments of shingles fell 28% 12 months over 12 months to the bottom business quantity since 2019.
For the total fiscal 12 months, SRS’ natural gross sales grew by a low single-digit proportion, regardless of slower demand within the dwelling enchancment business and a scarcity of storms, Decker mentioned. He mentioned House Depot expects the corporate’s natural gross sales to extend by a mid-single digit proportion in fiscal 2026.
House Depot opened 12 shops in fiscal 2025 and plans to open 15 further shops this fiscal 12 months.
The corporate additionally introduced on Tuesday that its board of administrators elevated its quarterly dividend by 1.3%, or 3 cents, to $2.33 per share. Will probably be payable subsequent month.
Correction: House Depot acquired SRS Distribution for $18.25 billion in 2024. An earlier model misstated the time component.
