Home Depot Reaffirms Annual Forecast for Professional Customer Demand
Home Depot's fourth-quarter results exceeded expectations and it maintained its annual outlook, as the home improvement chain operator benefited from resilient demand from professional contractors and small repair needs from budget-conscious customers.
Its share price rose nearly 3% in pre-market trading on Tuesday. Shares of competitor Lowe's, which reported quarterly results a day later, rose 1%.
Home Depot has been relying on professional (Pro) customers, such as contractors, builders, and carpenters, whose large and ongoing projects have helped the company offset the slowdown in large-scale DIY renovations amid rising borrowing costs and a sluggish U.S. real estate market.
The company has launched new credit and project planning tools to help professionals manage larger and more complex jobs, while expanding support through external sales networks.
Chief Financial Officer Richard McPhail stated that since 2023, U.S. consumers and companies have been in what he described as a "frozen housing environment," and there has not yet been any meaningful improvement.
He added that uncertainty among shoppers increased last year, and sustained declines in consumer confidence created additional pressure for the company.
According to data compiled by LSEG, Atlanta-based Home Depot reported that same-store sales for the three months ended February 1 grew by 0.4%, while analysts had expected sales to be roughly flat.
Michael Gunther, Vice President of Research and Market Intelligence at ConsumerEdge, said, "The performance trend in the fourth quarter suggests that consumers are prioritizing repairs and maintenance over big-ticket renovation projects."
Tariff Watch
"We are still analyzing the impact of the Supreme Court's ruling and the announcement of new tariffs," a company spokesperson said.
The U.S. Customs and Border Protection stated that the U.S. began imposing a new 10% tariff on all non-exempt goods starting Tuesday.
After the U.S. Supreme Court ruled its tariffs invalid, President Trump announced on Friday a new temporary 10% global tariff. On Saturday, Trump stated he would raise the tariff to 15%.
More than half of Home Depot's products come from the U.S., and over the past year, the company has selectively raised prices to protect its profits from the impact of tariff costs.
Home Depot's adjusted earnings per share for the fourth quarter were $2.72, exceeding analysts' expectations of $2.54.
Although customer transactions dropped by 8.5% to 366.5 million, the average ticket (average spending per customer transaction) for the quarter was still up 2.4% year-over-year to $91.28.
Home Depot maintained its forecast for comparable sales to be flat to up 2%, and adjusted earnings per share to be flat to up 4% in fiscal 2026 compared to the previous year.
Editor: Liu Mingliang
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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