Home Depot Earnings Beat Lifts Shares
Home improvement demand showed signs of stabilization.
Home Depot (HD) reported fourth-quarter results that exceeded Wall Street earnings expectations. The retailer also provided a cautious fiscal 2026 outlook as housing market pressures persist.
Key Points
- Adjusted EPS of $2.58 beat analyst estimates of $2.53
- Revenue declined 3.8% year over year to $38.2 billion
- Same-store sales rose 0.4%, ahead of expectations
Earnings Clear a Cautious Bar
Home Depot (HD) reported adjusted earnings of $2.58 per share for its fiscal fourth quarter, topping analyst expectations of $2.53. Revenue fell 3.8% from a year earlier to $38.2 billion, largely reflecting a shorter reporting period compared with the prior year, which included an extra week.
The earnings beat marked the company’s first bottom-line surprise in four quarters. Net income totaled $2.57 billion, or $2.58 per share, compared with $3 billion a year ago, though the prior period benefited from the additional trading week.
What Drove Same-Store Sales?
Comparable sales rose 0.4% overall and 0.3% in the United States, exceeding expectations for a slight decline. Growth was driven by higher average ticket sizes, which increased 2.4%, even as customer transactions declined 1.6%.
Big-ticket purchases over $1,000 rose 1.3%, while professional customers continued to outperform do-it-yourself shoppers. Digital sales increased approximately 11% year over year, with more than half of online orders fulfilled through stores.
Storm activity, which had been muted in the third quarter, picked up early in 2026. Store visits rose 2.7% last month, according to Placer.ai data, likely tied to winter storm preparation in the Northeast.
How Does Guidance Compare to Expectations?
For fiscal 2026, Home Depot expects total sales growth of 2.5% to 4.5%, with same-store sales growth ranging from flat to 2%. At the midpoint, that is below the 1.7% comp growth analysts were forecasting.
Adjusted earnings per share are projected to be flat to up 4% year over year. Analysts are expecting annual earnings growth of 2.7%.
Management noted ongoing housing market weakness and consumer uncertainty as continued headwinds. Existing U.S. home sales fell 8.4% in January, and consumer confidence reached its lowest level since 2014.
What It Means for Investors
The market reaction suggests investors focused more on the earnings beat and stabilization in comparable sales than on headline revenue declines. The shorter fiscal quarter and calendar comparison weighed on year-over-year figures, but underlying demand appeared steady.
Investors are also weighing the company’s cautious outlook against hopes for a housing rebound. While guidance did not exceed expectations, it signaled stability rather than further deterioration.
With the stock up 10% year to date before the report, the earnings update provided incremental reassurance rather than a dramatic shift in sentiment.
Conclusion
Home Depot’s fourth-quarter results showed steady demand in a challenging housing environment, with earnings outperforming expectations even as revenue declined due to calendar effects. The company’s measured outlook underscores a market still waiting for clearer signs of a housing recovery.
FAQs
Why did Home Depot stock rise after earnings?
Home Depot stock rose after the company reported adjusted earnings above Wall Street expectations and delivered better-than-expected same-store sales growth.
How much did Home Depot earn in the fourth quarter?
Home Depot reported adjusted earnings of $2.58 per share on revenue of $38.2 billion for the fiscal fourth quarter.
Did Home Depot’s revenue decline year over year?
Yes. Revenue fell 3.8% year over year, partly due to the prior year including an extra reporting week.
What is Home Depot’s outlook for fiscal 2026?
Home Depot expects total sales growth of 2.5% to 4.5% and adjusted earnings per share growth ranging from flat to up 4% for fiscal 2026.
This article was created with AI assistance and reviewed by an editor. For details, please refer to our Terms of Use.
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