Home Depot shares fell sharply after the home improvement giant released a cautious fiscal 2026 outlook during its investor day event held on December 9, 2025, at company headquarters in Atlanta, Georgia. The company projected weaker sales expectations and softer earnings growth, surprising analysts and pressuring investor sentiment.
Despite reaffirming fiscal 2025 guidance, the conservative forecast for next year signaled continuing uncertainty in the housing market and raised concerns about the pace of consumer spending recovery.
Home Depot expects comparable sales growth to range from flat to 2% in fiscal 2026, well below Wall Street’s average estimate of 2.34%. Earnings per share are projected to grow flat to 4%, while total sales are forecast to increase 2.5% to 4.5%.
The below-expectation guidance stands in contrast to earlier optimism from executives who anticipated a rebound in renovation spending as interest rates stabilized. Instead, management admitted that the improvement they planned for has not materialized.
The comments fueled immediate investor disappointment, triggering a decline in shares. Home Depot stock traded around $349.91 on December 8, 2025, extending months of weakness following several disappointing earnings reports.
Home Depot shares have struggled throughout 2025, and the latest announcement intensified concerns about demand in the home improvement sector. The stock, widely viewed as a consumer health indicator, has been unable to regain momentum amid slower spending on large home renovation projects.
Analysts warn that the lack of improvement in housing demand—even as mortgage rates fall—suggests that homeowners remain hesitant to initiate costly upgrades. This hesitation continues to weigh heavily on major retailers within the sector.
| Metric | Guidance |
|---|---|
| Comparable Sales Growth | Flat to 2% |
| Total Sales Growth | 2.5% to 4.5% |
| EPS Growth | Flat to 4% |
| Fiscal 2025 EPS Decline | 5–6% YoY |
The company maintained its fiscal 2025 full-year guidance, expecting diluted EPS to fall roughly 6% from last year and adjusted EPS around 5% lower. Executives reiterated confidence in long-term positioning but noted that 2026 improvement will be gradual.
The slower-than-expected pace of recovery challenges assumptions that falling interest rates would unlock pent-up consumer demand. Instead, Home Depot suggested that many homeowners continue to delay high-cost renovation projects due to economic uncertainty, job market caution and inflation concerns.
The remarks call into question expectations that the home improvement industry would rebound quickly, reinforcing broader worries about discretionary spending weakness heading into 2026.
Home Depot’s outlook forces investors to reconsider expectations for the home improvement and housing sectors. If comparable sales remain stagnant, profitability gains may be limited even with modest overall sales growth.
The gap between management projections and analyst estimates signals potential forecast revisions from Wall Street. Investors may need to reassess exposure to retail categories dependent on big-ticket consumer confidence.
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