Home Depot shares fell more than 6% after it reported broadly flat earnings for the third quarter of the 2025 financial year (Q3 FY25) and downgraded full-year revenue forecasts.
The world’s largest home improvement retailer said net earnings eased 1.3% to $3.601 billion and diluted earnings per share were 1.4% lower at $3.62 on net sales, which rose 2.8% to $41.352 billion in the three months ended 2 November 2025.
Sales included about $900 million from the recent acquisition of GMS Inc, which contributed eight weeks of sales in the quarter, reducing the comparable sales increase to 0.2%.
The performance was similar in the first nine months of FY25 with net income falling 1.9% to $11.585 billion and diluted EPS dropping 2.1% to $11.65 on revenue which added 5.6% to $126.485 billion.
Chair, President and Chief Executive Ted Decker said the results missed internal expectations mainly because of a lack of storms in the third quarter and an expected increase in demand in the third quarter did not materialise.
“We believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand," Decker said in a news release.
Home Depot also updated its FY25 guidance to reflect its Q3 performance, continued pressure in Q4 from the lack of storm activity, ongoing consumer uncertainty and housing pressure, and the inclusion of the recently-acquired GMS Inc.
The company forecast adjusted diluted EPS to decline by about 5.0% from $15.24 in fiscal 2024 compared with the previous estimate of a 2% drop year-on-year.
Although Q3 sales were higher than market forecasts, adjusted EPS was below analysts' expectations of $3.84.
Home Depot (NYSE: HD) shares closed $21.55 (6.02%) lower at $336.48 on Tuesday (Wednesday AEDT), capitalising the company at $334.93 billion ( A$512.2 billion).
More American retailers are set to report their quarterly results this week with earnings also expected from Walmart and Target.
Home Depot has 2,356 retail stores and more than 1,200 SRS Distribution locations in the United States and five other countries.
