Key Takeaways
- Home Depot surpassed analyst expectations for Q4 with EPS of $2.72 compared to the anticipated $2.54, while revenue reached $38.20B versus forecasts of $38.12B
- Year-over-year sales declined 3.8% in Q4, with one less week in the fiscal calendar contributing to the decrease
- The retailer increased its quarterly dividend payment by 1.3% to $2.33 per share, continuing its 156-quarter streak of dividend payments
- CFO Richard McPhail described a “frozen housing environment” persisting for three years alongside increasing consumer anxiety
- Fiscal 2026 guidance projects total sales growth between 2.5%–4.5%, while the company assesses potential impacts from Trump’s proposed 15% universal tariff
Home Depot released its fiscal 2025 fourth-quarter earnings on Tuesday, surpassing analyst projections for both profit and revenue even as overall sales contracted.
The home improvement giant reported adjusted earnings per share of $2.72, exceeding Wall Street’s projection of $2.54. Revenue totaled $38.20 billion, slightly ahead of the $38.12 billion consensus estimate. This marked the company’s first earnings beat following three consecutive quarters of misses.
Overall sales decreased 3.8% compared to the prior-year quarter, falling from $39.70 billion to $38.20 billion. Management attributed approximately $2.5 billion of this reduction to a calendar difference—last year’s quarter included 14 weeks while the current period had 13 weeks.
Comparable store sales—which account for factors like new store additions—increased 0.4% company-wide and 0.3% in domestic markets.
The quarter’s net income totaled $2.57 billion, or $2.58 per diluted share, representing a decline from $3.0 billion, or $3.02 per share, during the comparable period last year.
Speaking with CNBC, CFO Richard McPhail characterized the operating environment as a “frozen housing environment for three years.” He highlighted mounting consumer concerns regarding housing costs and potential employment instability as key factors influencing the company’s conservative projections.
Customer traffic decreased 1.6% on a year-over-year basis, while the average transaction value climbed 2.4%. Large-format purchases—transactions exceeding $1,000—grew 1.3%.
Professional Contractors Drive Growth
While retail consumers have reduced spending, the professional contractor segment demonstrated stronger performance. McPhail confirmed that Pro segment sales outperformed DIY during Q4, although specific figures weren’t disclosed.
The retailer has strategically invested in this channel through major acquisitions. It completed the $18.25 billion purchase of SRS Distribution in 2024, then added GMS, a specialty building materials distributor, for approximately $4.3 billion.
Home Depot launched 12 new stores during fiscal 2025 and intends to open 15 additional locations in the current fiscal year. The company now operates 2,359 retail outlets plus more than 1,250 SRS facilities.
Import Duties and Shareholder Returns Under Scrutiny
The retailer boosted its quarterly dividend distribution by 1.3% to $2.33 per share—extending its unbroken dividend payment record to 156 consecutive quarters. The payment will be distributed on March 26, 2026, to shareholders registered as of March 12, 2026.
Regarding import duties, McPhail explained the company continues analyzing implications following the Supreme Court decision that invalidated portions of the Trump administration’s tariff structure. President Trump subsequently introduced a proposal for a 15% universal global tariff.
“Not all the information is out right now,” McPhail stated. He emphasized that over half of Home Depot’s merchandise originates from domestic suppliers, and the company is actively diversifying its import base to ensure no individual foreign country represents more than 10% of procurement.
For fiscal 2026, Home Depot issued guidance projecting total sales growth of 2.5% to 4.5%, comparable sales growth ranging from flat to 2%, and adjusted EPS growth of flat to 4% from the fiscal 2025 baseline of $14.69.
The average interest rate on a 30-year fixed-rate mortgage dropped to 5.99% on Monday—the lowest reading since 2022, according to Mortgage News Daily.
