Home deposit On Tuesday, the real estate sector reported a decline in quarterly sales of about 4%, as the sluggish housing market and selective homeowner spending continued to weigh on home improvement demand.
The company also stuck to the guidance for the current fiscal year that it shared in December at an investor day. He said he expects total sales growth for the full year to be between about 2.5% and 4.5% and adjusted earnings per share to be about flat or up 4% from $14.69 a year ago. It expects full-year comparable sales growth, excluding one-time factors such as store openings and closings, to range from flat to 2%.
Despite falling sales in the fourth quarter, Home Depot beat Wall Street’s revenue and profit expectations for that period.
In an interview with CNBC, CFO Richard McPhail said U.S. consumers and the company have been “in a frozen real estate environment for three years” — and that there hasn’t been a significant thaw.
“What we’ve seen as additional pressure over the last year is this increase in consumer uncertainty, a gradual decline in consumer confidence,” he said. “And so those are signs that we’re watching for.”
He added that customers have expressed concerns to the company about housing affordability and job losses, dynamics that have influenced Home Depot’s outlook for the year.
Here’s what Home Depot reported for the fiscal fourth quarter of 2025 compared to Wall Street estimates, according to a survey of analysts by LSEG:
- Earnings per share: $2.72 adjusted versus $2.54 expected
- Income: $38.20 billion versus $38.12 billion expected
Shares rose about 2% premarket Tuesday as Home Depot beat earnings expectations after missing estimates for three straight quarters.
Higher interest rates, lower housing turnover and economic uncertainty have challenged the company as homeowners delay more expensive projects typically driven by buying or selling a home.
As the Atlanta-based retailer waits for business to pick up, it laid off 800 employees and announced a five-day-a-week return-to-office policy in late January.
Still, some investors predict an inflection point could come for Home Depot as mortgage rates moderate slightly. The average rate on a 30-year fixed mortgage fell to 5.99% on Monday, matching its lowest level since 2022, according to Mortgage News Daily.
Home Depot’s biggest sales season, spring, is also coming up.
McPhail said Home Depot’s business was relatively stable throughout the year, including in the fourth quarter, after adjusting for storms. He said the company was gaining market share, even though the industry was lagging.
In the three months ended Feb. 1, Home Depot’s net income fell to $2.57 billion, or $2.58 per share, from $3.0 billion, or $3.02 per share, a year earlier.
Revenue fell from $39.70 billion a year ago. The company said some decline was because the most recent fiscal year, 2025, had one less week. The additional week of fiscal 2024 generated $2.5 billion in sales.
Comparable sales, an industry measure also called same-store sales, rose 0.4% in the fiscal fourth quarter companywide and 0.3% in the United States.
In-store transactions during the quarter on Home Depot’s website and stores fell 1.6% year over year, but the average ticket increased 2.4% year over year. Large purchases, which the company defines as those over $1,000, were 1.3% higher than last year.
Some of these larger orders may reflect higher prices. McPhail said Home Depot has seen “modest” price increases, although he declined to say which items and categories are now costing customers more.
Higher tariffs have been one of the forces behind rising prices at retailers, including Home Depot. Businesses now face a new landscape when it comes to import duties after the Supreme Court ruled Friday that some tariffs imposed by the Trump administration were illegal. Shortly after the decision, President Donald Trump said in a news conference that he would seek to impose alternative tariffs and proposed an across-the-board global tariff that he has since set at 15 percent.
He said Home Depot is “still in the middle of our analysis” after the Supreme Court’s decision and the latest proposed rates.
“Not all information is available at this time. Not all terms are final regarding what has been announced,” he said. He added that Home Depot is “as well positioned as anyone to understand the impacts and manage them.”
More than half of what Home Depot sells comes from the United States, according to the company. It diversifies its imports, so that no country outside the United States accounts for more than 10 percent of the company’s purchases, McPhail said.
Even though the number of DIY buyers has declined, the company still has a more stable business segment.
Growing activity among home professionals, such as contractors and roofers, has boosted Home Depot’s overall business. It acquired SRS Distribution, a company that sells supplies to roofing, landscaping and pool professionals, for $18.25 billion last year in 2024 and bought GMS, a distributor of specialty building products, for about $4.3 billion last year.
Professional sales were stronger than DIY sales during the fourth quarter, McPhail said, although he declined to share specific numbers.
Home Depot opened 12 stores in fiscal 2025 and plans to open 15 additional stores this fiscal year.
The company also announced Tuesday that its board of directors increased its quarterly dividend by 1.3%, or 3 cents, to $2.33 per share. It will be payable next month.
As of Monday’s close, Home Depot shares were down about 2% over the past year, but up about 10% year to date. That compares to the S&P 500’s nearly 14% gains over the past year and its roughly flat performance year-to-date.