Key Takeaways
- Home Depot surpassed Q4 expectations with adjusted EPS of $2.72, topping the $2.54 analyst consensus
- Q4 revenue declined 3.8% to $38.20B, with the company citing a calendar shift that reduced the quarter by one week
- Comparable store sales increased 0.4% company-wide and 0.3% domestically
- Dividend increased 1.3% to $2.33 per share, marking the company’s 156th straight quarterly payout
- FY2026 outlook projects total sales growth between 2.5%–4.5% with adjusted EPS growth ranging from flat to 4%
Home Depot reported fourth-quarter fiscal 2025 earnings on Tuesday that exceeded analyst projections for both profit and revenue, marking its first positive surprise after three consecutive quarters of disappointments.
The home improvement retailer delivered adjusted earnings per share of $2.72, surpassing Wall Street’s $2.54 forecast. Revenue reached $38.20 billion, narrowly beating the anticipated $38.12 billion.
Year-over-year sales declined 3.8% from $39.70 billion. Management explained that approximately $2.5 billion of the shortfall stems from a calendar difference — the prior year’s quarter contained 14 weeks compared to 13 weeks in the current period.
Comparable sales registered a 0.4% increase across the entire business and a 0.3% gain in U.S. operations. Customer transactions decreased 1.6% versus the prior year, though average transaction value improved 2.4%. Purchases exceeding $1,000 grew 1.3%.
Net earnings totaled $2.57 billion, or $2.58 per diluted share, representing a decline from the year-earlier period’s $3.0 billion, or $3.02 per share.
Housing Market Remains Stagnant
In an interview with CNBC, CFO Richard McPhail described the current situation as a “frozen housing environment for three years.” He highlighted growing consumer concerns about home affordability and employment stability as major drivers behind the company’s conservative forecast.
Elevated borrowing costs combined with minimal home sales activity have led homeowners to postpone substantial remodeling projects — the type that traditionally accompany residential real estate transactions.
A potential silver lining emerged this week: the average rate on 30-year fixed mortgages fell to 5.99% on Monday, representing the lowest reading since 2022, per Mortgage News Daily. The company’s peak selling period — spring — is also on the horizon.
Professional Segment and Strategic Deals Provide Stability
While do-it-yourself consumers have shown restraint, the professional contractor segment demonstrated greater resilience. McPhail confirmed that Pro sales exceeded DIY performance during Q4, though he didn’t disclose exact numbers.
Home Depot strengthened its professional business through two significant acquisitions — the $18.25 billion purchase of SRS Distribution completed in 2024 and the roughly $4.3 billion acquisition of GMS, a specialized building materials distributor. The retailer currently manages 2,359 retail locations alongside more than 1,250 SRS facilities.
Trade Policy, Shareholder Returns, and Forward Outlook
Home Depot announced a 1.3% increase in its quarterly dividend to $2.33 per share, scheduled for payment on March 26, 2026. This represents the company’s 156th consecutive quarterly distribution to shareholders.
Regarding trade policy, McPhail noted that management continues evaluating the implications of President Trump’s proposed 15% universal import tariff, which follows a Supreme Court decision that invalidated portions of earlier trade restrictions. The company sources more than half its merchandise domestically and is working to limit purchases from any single foreign nation to less than 10% of total procurement.
For fiscal year 2026, Home Depot provided guidance calling for total sales growth of 2.5%–4.5%, comparable sales growth ranging from flat to 2%, and adjusted EPS growth between flat and 4% based on a $14.69 baseline.
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