Home Depot’s sales and profit outlook for the next fiscal year fell short of estimates, as demand wanes amid a flagging housing market.
The company projects same-store sales growth will be flat to 2% for fiscal 2026, below the average of LSEG estimates of 2.34%. Adjusted earnings per share growth would be flat to 4%, below estimates of 5.6%.
"We are focused on growing sales and delivering exceptional shareholder returns, supported by our culture and values," said Home Depot CEO Ted Decker. "The investments we've made over the last several years have further strengthened our distinct competitive advantages and position us well to grow share in an approximately US$1.1 trillion total addressable market.”
If the housing and home improvement markets recover, the company’s comparable sales growth could be around 4-5% next fiscal year, it said. It expects earnings per share growth in the mid to high single digit percentages in that scenario.
“Our Market Recovery Case reflects our performance expectations once we see momentum in housing activity and increased spend on larger projects driven by pent-up demand. We believe that the pressures in housing will correct and provide the home improvement market with support for growth faster than the general economy, and we expect to continue to grow faster than our market," said Home Depot CFO Richard McPhail.
The company reaffirmed its guidance for fiscal 2025, which expects same-store sales growth to be slightly positive. It projects earnings per share will fall by around 5% from the prior year.
Last quarter, comparable sales rose by 0.2%, while adjusted earnings per share dropped by 1.4% year-over-year.
United States mortgage rates dropped to their lowest point in 2025 in October, leading to an increase in existing home sales. However, the median existing home price rose 2.1% year-over-year that month, and the inventory of existing houses remains below pre-pandemic levels.
Home Depot’s (NYSE: HD) shares closed at $345.27, down from a previous close at $349.91. Its market capitalisation is $343.72 billion.
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