Contents
Key Takeaways
- Q4 adjusted earnings per share reached $2.72, surpassing the $2.54 Wall Street forecast
- Quarterly revenue totaled $38.20B, down 3.8% year-over-year, impacted by shorter fiscal quarter
- Comparable store sales increased 0.4% company-wide and 0.3% domestically
- Company boosts quarterly dividend by 1.3% to $2.33 per share, marking 156th straight payout
- Fiscal 2026 outlook calls for 2.5%–4.5% total sales expansion and flat to 4% adjusted EPS growth
The home improvement giant released fourth-quarter fiscal 2025 earnings on Tuesday, exceeding analyst projections on both the top and bottom lines—ending a three-quarter stretch of disappointments.
Adjusted earnings per share registered at $2.72, topping the Street’s $2.54 estimate. Revenue reached $38.20 billion, slightly ahead of the $38.12 billion consensus forecast.
Year-over-year sales declined 3.8% from $39.70 billion. Management noted that approximately $2.5 billion of the decrease stemmed from the current quarter spanning 13 weeks compared to 14 weeks in the prior-year period.
Comparable sales registered a 0.4% gain across the enterprise and 0.3% growth in U.S. operations. Customer transaction counts slipped 1.6% compared to last year, though average purchase values increased 2.4%. Large transactions exceeding $1,000 grew 1.3%.
Net earnings totaled $2.57 billion, equivalent to $2.58 per diluted share, compared with $3.0 billion, or $3.02 per share, during the same quarter last year.
Housing Market Remains Stagnant
In an interview with CNBC, CFO Richard McPhail characterized the current environment as a “frozen housing environment for three years.” He highlighted growing consumer concerns about housing affordability and employment stability as primary drivers behind the company’s measured forecast.
Elevated borrowing costs combined with minimal housing inventory turnover have prompted homeowners to postpone major renovation work—projects typically undertaken when buying or selling properties.
A potential catalyst emerged: the average 30-year fixed mortgage rate fell to 5.99% on Monday, marking its lowest point since 2022, per Mortgage News Daily data. Additionally, Home Depot’s peak selling period—the spring season—is fast approaching.
Professional Contractor Segment and Strategic Acquisitions Drive Performance
While do-it-yourself shoppers have become more conservative, the professional contractor business demonstrated resilience. McPhail confirmed that Pro segment sales outperformed DIY during the fourth quarter, though specific numbers weren’t disclosed.
Home Depot strengthened this division through two significant deals—the $18.25 billion acquisition of SRS Distribution completed in 2024 and the roughly $4.3 billion purchase of GMS, a specialty building materials distributor. The retailer currently maintains 2,359 traditional stores alongside more than 1,250 SRS facilities.
Dividend Increase, Tariff Considerations, and Forward Guidance
The company elevated its quarterly dividend payment by 1.3% to $2.33 per share, scheduled for distribution on March 26, 2026. This represents the 156th uninterrupted quarterly dividend payment.
Regarding tariff implications, McPhail indicated the organization continues evaluating the potential effects of President Trump’s proposed 15% universal global tariff, following a Supreme Court decision that invalidated portions of previous import levies. More than half of Home Depot’s merchandise originates from domestic suppliers, and the company is actively managing its sourcing to prevent any single international country from representing over 10% of total procurement.
Looking to fiscal 2026, Home Depot projected total sales growth between 2.5% and 4.5%, comparable sales growth ranging from flat to 2%, and adjusted EPS growth of flat to 4% based on a $14.69 baseline.
