Sales and earnings decline
Persistent market headwinds
The housing market continues to remain challenged with high mortgage rates and home prices hindering affordability. This, combined with inflationary pressures and job security concerns, have led to a substantial drop in demand for home improvement projects. Home Depot expects these headwinds to continue in fiscal year 2026 as it has “not yet seen a catalyst for an inflection in housing activity.”
In Q4, HD saw a 1.6% decline in comparable customer transactions. Comparable average ticket, on the other hand, increased 2.4%, driven mainly by price increases and a greater mix of higher ticket items. Although big-ticket comp transactions, or those over $1,000, were up 1.3% in the quarter, larger discretionary projects continued to see softness.
Home Depot’s comparable sales increased 0.4% in the fourth quarter, with a 0.3% rise in US comp sales. The company continues to see strength in its Pro segment, which delivered positive comps and outperformed the DIY segment in Q4. HD is generating more spend from Pro customers through its Pro ecosystem. SRS continues to grow organic sales and expand market share, and it is anticipated to deliver mid-single-digit organic sales growth in FY2026.
Outlook
For fiscal year 2026, Home Depot expects total sales to grow 2.5-4.5% and comparable sales to be flat to up 2%. Both GAAP and adjusted EPS are projected to be flat to up 4% from the previous year.