Home Depot has released a cautious preliminary earnings outlook for next year, signaling that the home improvement retailer does not expect a near-term rebound in the housing market.
The company forecasts full-year comparable sales growth to be flat to up 2%, below the average market estimate compiled by Bloomberg. Comparable sales are a key metric for retail performance. Home Depot’s total sales growth projection also fell short of market expectations.
The company’s performance has been pressured by the sluggish U.S. housing market. Amid high interest rates, consumers remain hesitant about big-ticket purchases and financing-dependent renovation projects. Although mortgage rates have eased from a year ago, elevated costs across the broader economy continue to weigh on consumer sentiment. Meanwhile, persistently high home prices have made housing increasingly unaffordable for a significant portion of the population.
Home Depot is set to host an analyst and investor day on Tuesday, where it also provided a "market recovery" scenario projection—anticipating stronger growth if housing activity and related spending rebound. Under this scenario, comparable sales could rise 4% to 5%.
Chief Financial Officer Richard McPhail stated, "We believe housing market pressures will eventually ease, allowing the home improvement sector to outpace broader economic growth." He added that Home Depot remains positioned to "continue growing faster than the industry."
In its latest earnings report, Home Depot noted that the anticipated demand recovery had yet to materialize, leading to a decline in its stock price. As of Monday’s close, shares have fallen 10% year-to-date, while the S&P 500 has gained 16%. In premarket trading Tuesday, the stock dipped another 0.8%.
Home Depot’s performance contrasts with other major retailers like Walmart, which has sustained growth despite broader U.S. market challenges.
Amid slowing growth, the Atlanta-based company has expanded its online operations and strengthened its professional contractor segment—a customer base that typically spends more than DIY homeowners.
Additionally, Home Depot reaffirmed its fiscal 2025 earnings guidance.
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