Key Takeaways
- Home Depot surpassed analyst projections for Q4 with EPS of $2.72 compared to the $2.54 forecast and revenue reaching $38.20B versus $38.12B anticipated
- Year-over-year Q4 sales declined 3.8%, with one fewer week in the reporting period contributing to the decrease
- Quarterly dividend increased 1.3% to $2.33 per share, representing the company’s 156th consecutive quarterly payout
- CFO Richard McPhail described the current market as a “frozen housing environment” spanning three years alongside rising consumer uncertainty
- Fiscal 2026 outlook projects total sales growth between 2.5%–4.5% while management continues assessing implications of Trump’s proposed 15% universal tariff
Home Depot revealed its fiscal 2025 fourth-quarter performance on Tuesday, exceeding analyst expectations for both earnings and revenue despite experiencing declining overall sales.
The retailer reported adjusted earnings per share of $2.72, surpassing the analyst consensus of $2.54. Revenue totaled $38.20 billion, edging past the anticipated $38.12 billion. This marked the company’s first earnings beat following three consecutive quarters of missing projections.
Overall sales decreased 3.8% compared to the prior-year quarter, falling from $39.70 billion to $38.20 billion. Management attributed approximately $2.5 billion of this reduction to a calendar difference, with the previous year’s quarter containing 14 weeks compared to 13 weeks in the current period.
Comparable store sales—which exclude variables like new store openings—increased 0.4% for the entire business and 0.3% domestically.
The company reported quarterly net income of $2.57 billion, equivalent to $2.58 per diluted share, representing a decline from $3.0 billion, or $3.02 per share, recorded in the comparable period last year.
During a CNBC interview, CFO Richard McPhail explained that the business has been navigating a “frozen housing environment for three years.” He highlighted increasing consumer concerns regarding housing affordability and potential employment losses as key factors influencing the company’s conservative forecast.
Customer transactions at stores decreased 1.6% year-over-year, while the average purchase amount increased 2.4%. Transactions exceeding $1,000—classified as big-ticket items—grew 1.3%.
Professional Contractor Business Shows Resilience
While retail consumers have reduced spending, the professional contractor segment demonstrated stronger performance. McPhail confirmed that Pro customer sales exceeded DIY sales during Q4, though specific figures were not disclosed.
The retailer has strategically invested in this segment through major acquisitions. In 2024, it completed the purchase of SRS Distribution for $18.25 billion, subsequently adding GMS, a specialized building products distributor, for approximately $4.3 billion.
Home Depot added 12 new stores during fiscal 2025 and has plans to open 15 additional locations in the current fiscal year. The company now manages 2,359 retail locations along with more than 1,250 SRS facilities.
Dividend Increase and Tariff Considerations
The retailer announced a 1.3% increase to its quarterly dividend, bringing it to $2.33 per share—representing the 156th consecutive quarter of cash dividend payments. Shareholders of record on March 12, 2026, will receive payment on March 26, 2026.
Regarding trade policy, McPhail indicated the company continues analyzing potential impacts following the Supreme Court decision that invalidated portions of the Trump administration’s import tariffs. President Trump has subsequently announced plans for a 15% universal global tariff.
“Not all the information is out right now,” McPhail stated. He emphasized that over half of Home Depot’s merchandise is domestically sourced, and the company has been diversifying its international supply chain to ensure no single foreign country represents more than 10% of total purchases.
For fiscal 2026, Home Depot provided guidance projecting total sales growth of 2.5% to 4.5%, comparable sales growth ranging from flat to 2%, and adjusted EPS growth of flat to 4% from the $14.69 baseline established in fiscal 2025.
According to Mortgage News Daily, the average interest rate for a 30-year fixed mortgage declined to 5.99% on Monday—the lowest level observed since 2022.
