Dwelling Depot on Tuesday posted a roughly 4% quarterly gross sales decline, as a sluggish actual property market and selective spending by householders continued to weigh on dwelling enchancment demand.
The corporate additionally caught by the present fiscal yr forecast that it shared in December at an investor day. It stated it expects full-year whole gross sales progress to vary between about 2.5% and 4.5% and adjusted earnings per share to be between roughly flat and up 4% from $14.69 within the prior fiscal yr. It expects full-year comparable gross sales progress, which takes out one-time elements like retailer openings and closures, to vary from flat to up 2%.
Regardless of the fiscal fourth-quarter gross sales decline, Dwelling Depot topped Wall Road’s income and earnings expectations for that interval.
In an interview with CNBC, Chief Monetary Officer Richard McPhail stated U.S. customers and the corporate have “been in a frozen housing setting for 3 years” – and there hasn’t been a significant thaw.
“What we have seen as an added stress over the past yr has been this enhance in shopper uncertainty, a gradual decline in shopper confidence,” he stated. “And so these are indicators we’re watching.”
He stated clients have advised the corporate that they’re involved about housing affordability and job losses, dynamics that coloured Dwelling Depot’s outlook for the yr.
Here is what Dwelling Depot reported for the fiscal fourth quarter of 2025 in contrast with Wall Road’s estimates, in accordance with a survey of analysts by LSEG:
- Earnings per share: $2.72 adjusted vs. $2.54 anticipated
- Income: $38.20 billion vs. $38.12 billion anticipated
The corporate’s shares rose greater than 3% on Tuesday, as Dwelling Depot beat earnings expectations after lacking estimates three quarters in a row.
Greater rates of interest, decrease housing turnover and financial uncertainty have challenged the corporate, as householders delay the pricier tasks sometimes spurred by shopping for or promoting a house.
Within the three-month interval that ended Feb. 1, Dwelling Depot’s internet revenue fell to $2.57 billion, or $2.58 per share, from $3.0 billion, or $3.02 per share, within the year-ago interval. Excluding accounting-related bills associated to the worth of SRS Distribution and its subsidiaries, Dwelling Depot posted adjusted earnings per share of $2.72.
Income dropped from $39.70 billion within the year-ago interval. The corporate stated some decline was as a result of most up-to-date fiscal yr 2025 having one fewer week. The extra week within the 2024 fiscal yr contributed $2.5 billion in gross sales.
Because the Atlanta-based retailer waits for enterprise to select up, it laid off 800 staff and introduced a five-day per week return-to-office coverage in late January.
But some buyers anticipate an inflection level could possibly be coming for Dwelling Depot, as mortgage charges average barely. The common charge on a 30-year fastened mortgage fell to five.99% on Monday, matching its lowest stage since 2022, in accordance with Mortgage Information Every day.
Dwelling Depot’s largest promoting season, springtime, can be forward.
McPhail stated Dwelling Depot’s enterprise was comparatively steady all year long, together with within the fourth quarter, when adjusting for storms. He stated the corporate is gaining market share, even because the sector lags.
Comparable gross sales, an trade metric additionally referred to as same-store gross sales, elevated 0.4% within the fiscal fourth quarter throughout the enterprise and 0.3% within the U.S.
Retailer transactions within the quarter throughout Dwelling Depot’s web site and shops dropped by 1.6% yr over yr, however common ticket rose 2.4% yr over yr.
Pricing and tariff developments
The expansion in common ticket “primarily displays some value will increase,” Billy Bastek, govt vp of merchandising, stated on the corporate’s earnings name.
McPhail advised CNBC that Dwelling Depot has had “modest” value will increase, although he declined to say which objects and classes now price clients extra.
Half of Dwelling Depot’s 16 merchandising departments posted optimistic comparable gross sales from the year-ago interval, Bastek stated. These had been energy, electrical, storage, indoor backyard, {hardware}, plumbing, bathtub and kitchen.
Large-ticket purchases, which the corporate defines as these over $1,000, had been 1.3% greater than the year-ago interval, due to clients buying and selling up for brand new and modern objects and shopping for higher-priced merchandise, Bastek stated.
Even with these pricier purchases, there are indicators that some clients are value-conscious. Bastek stated some clients are buying and selling all the way down to lower-priced counter tops and home equipment, although that habits hasn’t been widespread.
As U.S. customers postpone promoting and shopping for properties, CEO Ted Decker stated “there’s perhaps a bit extra restore than substitute.”
“We’re actually bouncing alongside what we hope could be a backside in issues like [housing] turnover,” he stated.
Greater tariffs have been one of many forces driving value hikes at retailers, together with Dwelling Depot. Corporations now face a brand new panorama for import duties after the Supreme Court docket on Friday dominated that a few of the Trump administration’s tariffs had been unlawful. Quickly after the ruling, President Donald Trump stated at a information convention that he would pursue different tariffs and proposed an across-the-board world tariff that he has since set at 15%.
Decker stated Dwelling Depot is “nonetheless in the midst of our evaluation” after the Supreme Court docket ruling and newest proposed tariffs.
“Not all the knowledge is out proper now. Not all of the language is closing round what was introduced,” he stated. He added that Dwelling Depot is “as properly positioned as anybody to grasp any impacts and handle by them.”
Greater than half of what Dwelling Depot sells comes from the U.S., in accordance with the corporate. It is diversifying its imports, in order that no single nation outdoors of the U.S. represents greater than 10% of the corporate’s purchases, McPhail stated.
Although do-it-yourself patrons have in the reduction of, the corporate nonetheless has a extra steady enterprise section.
A rising enterprise from dwelling professionals, similar to contractors and roofers, has boosted Dwelling Depot’s general enterprise. It acquired SRS Distribution, an organization that sells provides to roofing, landscaping and pool professionals, for $18.25 billion final yr in 2024 and purchased GMS, a specialty constructing merchandise distributor, for about $4.3 billion final yr.
Professional enterprise is powerful, however nonetheless pressured
Professional gross sales had been stronger than do-it-yourself gross sales in the course of the fourth quarter, McPhail advised CNBC, although he declined to share particular figures.
Even the professional facet of the enterprise has been pressured. McPhail stated on the corporate’s earnings name that SRS’ gross sales declined by a low single-digit proportion within the fourth quarter in contrast with the year-ago interval.
But he added the corporate — which sells provides to roofers and different execs — fared higher than others. He referred to market analysis information for the trade, which confirmed that whole shipments of shingles fell 28% yr over yr to the bottom trade quantity since 2019.
For the complete fiscal yr, SRS’ natural gross sales grew by a low single-digit proportion, regardless of slower demand within the dwelling enchancment trade and an absence of storms, Decker stated. He stated Dwelling Depot expects the corporate’s natural gross sales to extend by a mid-single digit proportion in fiscal 2026.
Dwelling Depot opened 12 shops in fiscal 2025 and plans to open 15 extra shops this fiscal yr.
The corporate additionally introduced on Tuesday that its board of administrators elevated its quarterly dividend by 1.3%, or 3 cents, to $2.33 per share. It will likely be payable subsequent month.
As of Monday’s shut, Dwelling Depot shares are down about 2% over the previous yr, however up about 10% yr up to now. That compares with the S&P 500’s almost 14% features over the previous yr and its roughly flat efficiency yr up to now.
