Home Depot (HD) stock fell 4% early Tuesday after the home improvement retailer reported third quarter results that missed forecasts and lowered its full-year outlook as the US housing market remains sluggish.
The company expects same-store sales for the full year to be "slightly positive," whereas it had previously expected a 1% increase for 2025.
Full-year profits are also now expected to fall more sharply, with adjusted earnings per share forecast to drop by 5%, more than the 2% decline the company expected as of August.
In the third quarter, the company's adjusted earnings per share came in at $3.74, missing forecasts for earnings per share of $3.84, according to Bloomberg data. Revenue tallied $41.4 billion, which was ahead of forecasts for $41 billion.
Same-store sales rose 0.2% overall and 0.1% in the US. The Street expected same-store sales to rise closer to 1.3% in the third quarter.
In the company's release, CEO Ted Decker said its third quarter results came in below forecasts, "primarily due to the lack of storms in the third quarter, which resulted in greater than expected pressure in certain categories."
Telsey Advisory Group's Joe Feldman wrote in a note to clients early Tuesday that "the result and guidance reduction are disappointing, given commentary last quarter that home improvement demand for small repair and maintenance projects was picking up."
Read more: 6 home improvements that could lower your home insurance costs
Feldman said he still thinks "the company stands to benefit as housing demand recovers."
Home Depot's results come as mortgage rates remain stubbornly high, pushing more Americans to stay in their current living situations, while a softening labor market has also pressured demand for the large-scale renovation projects crucial to the company's results.
"While underlying demand in the business remained relatively stable sequentially, an expected increase in demand in the third quarter did not materialize," Decker said in the release.
"We believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand."
Home Depot falls 4% pre-market after company cuts full-year outlook as consumers put off home improvement projects
byu/callsonreddit inwallstreetbets
Posted by callsonreddit
24 Comments
People got money for homes?
Are we tired of winning yet?
Puts on Lowe’s as the sympathy play
are we still winning? I was told I wouldn’t get tired of winning
That’s a warning sign for the economy at large.
Home Depot customer service is terrible and their pricing is expensive now.
So much for a k recovery
remove labor, increase costs brilliant economic strategy
Well yeah….. the same caulk I use to buy and fondle is now 8.25$. Use to play with it for 2.25$
Vibes-based economy, and brother the vibes are off.
Id say they should be better off in a recession as people will put off contractors for DIY projects.
Not enough Bob the builders in Murica
I’m in the high(er) end residential construction industry and every contractor I know is looking for work. Clients are backing out of projects and everyone is scrambling. It’s bad. Been bad all year honestly but way worse now. Not looking good at all for next year.
My portfolio fell about 15% since the government reopened and I don’t even have any HD shares. It’s going to be a rough ride for a while.
Don’t need much building materials to build favelas.
There’s also a growing boycott movement – similar to what happened with Target. HD owner is super right wing and is politically active.
Not sure but that might be a contributing factor
They also work with ICE to allow them in their lots instead of kicking them out of private property.
Just let people refinance into a 50 yr mortgage. That’ll work, right? Right??
This is interesting to me, home sales are extremely low due to high prices and high interest rates. So I would think that people would be more willing to do home improvement projects since they are handcuffed to thier houses.
I suppose on the flip side people cant as easily take out helocs to pay for it. It really shows how much of the economy runs on mortgage debt.
Why hasn’t AI solved home renovations
No shit. Anything house building related has been getting more and more expensive since Covid and now no one has money too.
No shit. A sheet of 3/4 plywood is $84. A 12 foot treated 1×6 is $30. No way I’m working on anything right now.
Have they tried announcing a partnership in AI?
Housecoin only goes up tho