home depot The company on Tuesday reported a roughly 4% drop in quarterly sales as a weak real estate market and selective spending by homeowners continued to weigh on home improvement demand.
The company also maintained its outlook for the current fiscal year, which it announced at an investor briefing in December. For the full year, the company expects total sales to grow by about 2.5% to 4.5%, with adjusted earnings per share expected to be about flat to 4% higher than last year’s $14.69. The company expects full-year comparative sales growth, excluding temporary factors such as store openings and closings, to be flat to 2% higher.
Despite the decline in sales in the fourth quarter, Home Depot beat Wall Street’s sales and earnings estimates for the same period.
In an interview with CNBC, Chief Financial Officer Richard McPhail said U.S. consumers and the company have been “in a frozen housing environment for three years” and have not seen a meaningful thaw.
“What we’ve seen as additional pressure over the last year is increased uncertainty for consumers and a gradual decline in consumer confidence,” he said. “And these are the signs that we’re paying attention to.”
He said customers have told the company they are concerned about home affordability and job losses, and that these trends have shaped Home Depot’s outlook for this year.
Here’s what Home Depot reported for the fourth quarter of 2025, compared to Wall Street expectations, according to a survey of analysts by LSEG.
Earnings per share: $2.72 adjusted vs. $2.54 expected Revenue: $38.2 billion vs. $38.12 billion expected
Home Depot beat earnings estimates after missing estimates for three consecutive quarters.
Rising interest rates, lower housing turnover and economic uncertainty are challenging the company as homeowners delay expensive projects typically caused by buying and selling homes.
The Atlanta-based retailer laid off 800 employees and announced a return to offices five days a week in late January as it waits for business to recover.
But some investors are betting Home Depot could reach an inflection point as mortgage rates ease slightly. The average interest rate on a 30-year fixed mortgage fell to 5.99% on Monday, matching the lowest level since 2022, according to Mortgage News Daily.
Spring, Home Depot’s biggest shopping season, is fast approaching.
Mr. MacPhail said Home Depot’s performance had been relatively stable throughout the year, including in the fourth quarter as the company braced for the storm. He said the company is gaining market share even though the sector is lagging.
Home Depot’s net income for the three months ended Feb. 1 fell to $2.57 billion, or $2.58 per share, from $3 billion, or $3.02 per share, a year earlier.
Revenue was down from $39.7 billion in the same period last year. The company said the slight decrease was due to one week less in its most recent fiscal year 2025. The additional weeks in fiscal 2024 contributed $2.5 billion in revenue.
Comparable sales, an industry measure also known as same-store sales, increased 0.4% across the business and 0.3% in the U.S. in the fiscal fourth quarter.
In-store transactions across Home Depot’s website and stores were down 1.6% year-over-year in the quarter, but average ticket counts were up 2.4% year-over-year. Large purchases, defined by the company as over $1,000, rose 1.3% year-on-year.
Some large orders may be reflected in a higher price. Mr. MacPhail said Home Depot’s price increases were “modest,” but declined to say which items or categories were resulting in higher prices for customers.
Higher tariffs are one factor driving price increases at retailers including Home Depot. Companies now face a new situation surrounding import tariffs after the Supreme Court ruled Friday that some of the Trump administration’s tariffs are illegal. Immediately after the ruling, President Donald Trump said at a press conference that he would pursue alternative tariffs and proposed a global tariff, which has since been set at 15%.
He said Home Depot is “still in the process of analyzing” the Supreme Court ruling and the latest proposed tariffs.
“Not all information is out at this time. Not all language has been finalized for what was announced,” he said. He added that Home Depot is “in a position to understand and address any impacts.”
The company says more than half of Home Depot’s products are made in the United States. MacPhail said the company is diversifying its import sources, with no single country other than the U.S. accounting for more than 10% of its purchases.
Although do-it-yourself buyers have left, the company still has a more stable business segment.
Growth in business from home professionals such as contractors and roofers is boosting Home Depot’s overall business. Last year, the company acquired SRS Distribution, which sells products to roofing, landscaping and pool professionals, for $18.25 billion in 2024, and GMS, a specialty building products distributor, for about $4.3 billion last year.
MacPhail said professional sales were stronger than do-it-yourself sales in the fourth quarter, but declined to provide specific numbers.
Home Depot plans to open 12 stores in fiscal 2025 and 15 more this 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. Payment will be made next month.
As of Monday’s close, Home Depot stock was down about 2% over the past year but up about 10% since the beginning of the year. By comparison, the S&P 500 index is up nearly 14% over the past year, with a roughly flat year-to-date performance.
