ii view: results nudge Home Depot near to multi-month high

Photo: Smith Collection/Gado/Getty Images.

Fourth-quarter results to 1 February  

• Net sales down 3.8% to $38.2 billion (£28.3 billion)
• Comparable or Like-For-Like (LFL) sales up 0.4%
• Adjusted diluted Earnings Per Share (EPS) down 13% to $2.72 per share

Guidance: 

• Continues to expect comparable sales of flat to up 2%
• Continue to expect adjusted earnings-per-share for the full year 2026 to grow by between 0 and 4% versus $14.69 in fiscal year 2025

Chief executive Ted Decker said:

“Throughout fiscal 2025, our teams did an incredible job engaging with our customers and growing market share, and I would like to thank them for their hard work and dedication. For the fourth quarter, our results were largely in-line with our expectations.”

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ii round-up:

The Home Depot Inc (NYSE:HD) today detailed sales and profit that beat Wall Street estimates, with the DIY retailing giant maintaining hopes for potential sales and earnings growth in 2026. 

Fourth-quarter revenue was down 3.8% from a year ago at $38.2 billion, causing a 13% drop in adjusted earnings to $2.72 per share. Analyst had forecast outcomes of $38.1 billion and $2.54 per share respectively.  

Shares in the Dow Jones company rose 3% in US trading having come into these latest results down by a tenth in 2025. The Dow Jones index rose 13% last year, while UK and European DIY retailer Kingfisher (LSE:KGF) climbed by a quarter.  

Management previously flagged consumer uncertainty and continued pressure in housing as impacting home improvement demand. Home Depot operates more than 2,300 stores across the US, Canada and Mexico.

The Atlanta headquartered retailer continues to expect total 2026 sales to grow by 2.5% to 4% over 2026, with adjusted earnings between flat and up 4%. That’s potentially an improvement from a revenue gain of 3.2% during 2025 and drop in earnings of almost 4%. 

Comparable, or like-for-like sales for this latest quarter rose 0.4%, an acceleration from a gain of 0.3% in the prior third quarter. Home Depot plans approximately 15 new stores in 2026. 

The average rate on a 30-year fixed mortgage fell to 5.99% earlier this month, matching its lowest level since 2022. 

Home Depot just weeks ago announced 800 job losses, with office staff expected to return to the office five days a week. 

ii view:

Started in 1978, Home Depot describes itself as the world's biggest home improvement retailer, generating 2025 revenues of $164.7 billion. Employing over 470,000 people, the retailer sells over 35,000 products instore and around one million items online. 

For investors, management comments warning of ongoing pressure on consumers are not to be overlooked. The importance of the weather on sales needs to be remembered. Higher costs of products imported from overseas persists after President Trump announced a new tariff flat across the board, while a forecast price/earnings (PE) ratio above the three-year average may suggest the shares are not obviously cheap. 

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To the upside, a diversity of products and geographical regions exist. A significant sourcing of US-made goods should help navigate tariff headwinds. Bolt-on acquisitions have previously helped boost growth, while a forward dividend yield of around 2.4% is not to be forgotten. 

In all, and while reasons for caution persist, this generally well-managed company looks to remain deserving of its place in many diversified investor portfolios. 

Positives: 

• Strong brand name
• Attractive dividend (not guaranteed)

Negatives:

• Uncertain economic outlook
• The weather can impact performance

The average rating of stock market analysts:

Buy