US home improvement retailer Home Depot (HD) posted forecast-beating Q4 results and confirmed its current-year earnings guidance. Analysts had expressed concern the company might struggle due to consumer uncertainty and a weak housing market.
| Share price: $389 (+3.2%) | PE: 25x |
| Market cap: $390bn | Yield: 2.4% |
‘Steady demand’
For the three months to 1 February, the firm reported sales of $38.2 billion, down 3.8% on the previous year. However, it was good enough to beat the Wall Street consensus of $38.09 billion which is what mattered.
Also, Q4 2025 consisted of 13 weeks against 14 a year earlier, so on a LFL basis sales rose 0.4%. Moreover, the 14th week in Q4 2024 added $2.5 billion of sales to the $39.7 billion total.
Q4 earnings per share were $2.72, down 13% on the previous year’s $3.13 but again ahead of the $2.53 consensus. The firm said it saw ‘steady’ housing project demand and without storm activity underlying demand was ‘relatively stable’ through FY25.
For FY26, the firm reiterated its modest guidance of 2.5% to 4.5% sales growth compared with 3.2% for FY25. LFL growth is seen at 2%, while the firm plans to open 15 new stores this fiscal year.
Gross margins are seen around 31% against FY25’s 33.3%, while operating margins are seen at 12.4% to 12.6% against 12.7%. Adjusted diluted EPS growth is seen around 4% to $15.25 against a Wall Street consensus of $15.09.
Analysts had taken a power saw to their forecasts coming into this report due to concerns over the US economy. Therefore, even though sales and earnings were down on Q4 2024, the firm still beat expectations.
According to data released last week, US new home sales dropped in December and in 2025. Meanwhile, a report from the association of house builders showed homebuilder confidence slipped in February.
However, Home Depot has managed the slowdown by increasing sales to professional contractors and cash-conscious home DIY-ers. Its Pro offering targets skilled trade customers like builders and carpenters whose ongoing jobs have helped offset a drop in big projects.
Read the press release here: https://ir.homedepot.com/
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