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Home Depot cut its full-year profit outlook after reporting quarterly earnings that fell short of Wall Street expectations, sending the home improvement retailer’s stock lower on Tuesday. The move adds a fresh signal that US consumers remain cautious about big-ticket home projects as the housing market stays under pressure.
Home Depot now expects adjusted earnings per share to fall about 5% for fiscal 2025, deeper than its earlier forecast for a 2% decline. The company also guided for comparable sales to grow only slightly, trimming its prior outlook for a 1% increase.
In the third quarter, Home Depot reported adjusted earnings per share of $3.74, below analyst estimates of about $3.84. Revenue reached $41.35 billion, a touch ahead of forecasts, but same-store sales rose just 0.2% worldwide and 0.1% in the US.
Executives said an anticipated pickup in demand during the quarter did not appear. Chief Executive Officer Ted Decker pointed to fewer major storms, which usually drive demand for categories such as roofing, generators, and emergency repair products. The shortfall led management to reset expectations for the rest of the year.
Home Depot shares fell about 4% in early trading, extending a year-to-date slide in the stock. The company’s performance contrasted with broader equity benchmarks, which have shown gains this year.
Decker said that consumer uncertainty and ongoing strain in the US housing market weigh on home improvement demand. High borrowing costs, elevated home prices, and affordability worries have kept many households from moving or taking on large renovation projects. Shoppers instead focus on smaller tasks, such as painting and garden upgrades that need less funding.
Executives noted that core drivers of home improvement demand, including home price appreciation, household formation, and housing turnover, remain under pressure. Comparable transactions fell 1.6% in the quarter, underscoring softer activity in bigger projects like kitchen and bathroom remodels.
Tariffs and higher operating expenses also strain margins. Management cited increased costs for imported goods, wages, and logistics, although earlier shipments helped limit price changes on many items. Analysts say these factors, together with a weak housing backdrop, could cap growth until borrowing costs and housing activity recover.
Retailers such as Target and Walmart report results this week, offering a broader view of US shopping patterns. Any signs of strain might heighten concerns about growth in early 2026. For now, Home Depot relies on its online platform and professional customers to sustain sales.
Also Read: Is Home Depot Stock on Track to Double Within 5 Years?
