Abstract
Home Depot will report results on February 24, 2026 Pre-Market; this preview synthesizes market forecasts, last quarter’s performance, management’s segment trends, and recent institutional views to frame expectations for revenue, margins, and adjusted EPS alongside key demand drivers and risks.
Market Forecast
Consensus indicators from the company’s forecast field point to Home Depot’s current quarter revenue estimate of $38.10 billion with a year-over-year decline of 2.70%, estimated EBIT of $3.92 billion with a year-over-year decline of 14.49%, and estimated EPS of 2.542 with a year-over-year decline of 15.52. Margin expectations implied by recent trends suggest investors are watching potential pressure on gross profit margin and net profitability given soft discretionary categories and ongoing shrink investments; no explicit gross margin or net margin guidance was provided in the forecast feed. Management’s main business outlook highlights stability in core project-related categories and softer seasonal and discretionary sales; near-term spend mix skews toward essential maintenance and small projects, while Pro demand remains sensitive to housing turnover. The most promising area remains large project Pro activity tied to structural home improvement demand; within the last reported period, Building Materials generated $13.60 billion, positioning it as a core revenue engine, though the year-over-year trajectory for the current quarter is guided lower in aggregate.
Last Quarter Review
In the previous quarter, Home Depot posted revenue of $41.35 billion, gross profit margin of 33.41%, GAAP net profit attributable to shareholders of $3.60 billion, net profit margin of 8.71%, and adjusted EPS of 3.74, with revenue up 2.82% year over year and adjusted EPS up 1.91% year over year. A notable financial highlight was operating performance that exceeded revenue estimates modestly while EPS trailed consensus, signaling mix and margin friction even as top line improved. Main business contributions were led by Building Materials at $13.60 billion, Décor at $12.94 billion, and Hardware/Tools at $10.93 billion, underscoring project categories as the bulk of sales; category-level year-over-year splits were not disclosed in the return and thus are not cited.
Current Quarter Outlook (with major analytical insights)
Core Home Improvement and Project Demand
The core engine for Home Depot remains project-driven spending across Building Materials, Décor, and Hardware/Tools. The forecast field points to revenue of $38.10 billion, implying a 2.70% year-over-year decline and signaling cautious demand as consumers curb discretionary big-ticket purchases and delay remodels amid muted existing-home turnover. With EBIT expected to decline by 14.49% and estimated EPS down 15.52%, the setup suggests negative operating leverage from lower traffic and a less favorable mix, consistent with an environment where smaller jobs and repair/maintenance work dominate. If lumber and commodity deflation persists alongside promotions to clear seasonal inventory, gross profit margin could see incremental pressure relative to last quarter’s 33.41%, although efficiencies in supply chain and private-label penetration could partially offset. Investors will watch whether cost discipline and merchandise productivity can help cushion EBIT compression; any sign of stabilization in ticket size or units could reduce downside risk to the EPS trajectory.
Pro Customer Spend and Large Projects
Large project Pro activity—closely linked to Building Materials and installation-heavy categories—remains a critical swing factor for both revenue trajectory and margins. The last reported quarter showed Building Materials at $13.60 billion, confirming its weight in the revenue mix. However, the current quarter’s forecast implies that even Pro-oriented categories could face slower growth near term, in step with a 2.70% top-line decline and a 14.49% EBIT contraction. The operating sensitivity arises because Pro baskets are larger and more margin-accretive; a deceleration can compound fixed-cost absorption issues and discounting needs. A gradual improvement in housing turnover and backlog execution could provide a medium-term floor for Pro demand, but near-term visibility remains constrained until transaction volumes in housing reaccelerate. Any commentary that points to improving order backlogs, better bid pipelines, or incremental share gains from service enhancements would counter the negative slope of EBIT estimates and help investors recalibrate margin expectations.
Ticket, Mix, and Margin Dynamics
The estimated EPS decline of 15.52% versus a 2.70% revenue contraction implies meaningful pressure below gross profit, reflecting a blend of weaker mix in higher-margin discretionary categories and increased costs tied to shrink and wage investments. With last quarter’s gross profit margin at 33.41% and net margin at 8.71%, the debate centers on whether merchandising initiatives, pricing discipline, and private-label growth can sustain gross margin in a softer sales environment. If holiday and seasonal sell-through required heavier promotions, the gross margin cadence may step down sequentially; conversely, favorable product cost and freight normalization could soften the blow. On the expense side, continued investments in omnichannel and supply chain are strategic but can weigh on EBIT flow-through if sales do not keep pace. Watch for management’s qualitative color on inventory turns and clearance activity, which could illuminate whether margin pressure is transitory or likely to persist into the spring selling season.
Analyst Opinions
Across recent broker updates, the balance of opinion skews positive. Buy ratings have been reiterated by UBS (price target $430.00), Piper Sandler ($450.00), Wells Fargo (bullish stance), Bank of America Securities ($430.00), TD Cowen ($410.00), and Telsey Advisory ($455.00), while Hold or Neutral stances include Morgan Stanley (price target adjusted to $395.00), Bernstein ($403.00), Oppenheimer ($420.00), and Stifel ($370.00). The ratio of bullish to neutral/hold appears tilted toward bullish, with Buy recommendations outnumbering Hold calls. The majority view emphasizes that Home Depot is positioned to benefit from a gradual housing recovery and demand normalization, with several institutions highlighting share gains and strategic investments as supports for long-term growth. UBS points to a favorable setup as transitory headwinds abate and as housing turnover picks up, which could reignite Pro demand and higher-margin project categories. Piper Sandler and Telsey Advisory underscore the company’s merchandising execution and balance sheet flexibility, suggesting capacity to invest through the cycle. Bank of America and Wells Fargo both highlight share capture opportunities and operational initiatives that may stabilize margins once top-line pressures moderate. The majority conclusion is that near-term earnings may remain pressured, but the stock’s medium-term risk-reward is supported by improving housing fundamentals and ongoing productivity gains; investors will look for confirmation in February 24, 2026 Pre-Market commentary on demand mix, margin discipline, and early spring trends.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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