Home Depot posts revenue beat as home improvement challenges come into focus

Home Depot’s (HD) fourth quarter results slightly topped Wall Street’s low expectations on Tuesday.

In a slight improvement, the home improvement chain posted a 14.1% increase in revenue year over year to $39.7 billion. Adjusted earnings per share grew to $3.13, up from $2.86 last year and above estimates of $3.04.

Home Depot has been struggling as shoppers held off on major renovation projects thanks to high interest rates and more cautious spending overall. That pressure is expected to continue; total net sales are expected to grow 2.8% in fiscal year 2025, while same-store sales growth is expected to increase by 1%.

On the full-year outlook, CFO Richard McPhail told investors that Home Depot saw “some benefits from hurricanes that won’t fully repeat in 2025” and that it assumes “continued pressure on larger projects.”

Telsey Advisory Group’s Joe Feldman wrote in a note to clients that the outlook was “softer than expected,” adding that the “cautious approach in this uncertain environment makes sense and could prove conservative” as consumers that have put off big projects over stubbornly higher mortgage rates, that executives say consumers will eventually “get used to.”

Home Depot stock reversed early losses on Tuesday to gain more than 3.5% in afternoon trading.

For the quarter, same-store sales growth rose 0.8%, whereas Wall Street had been looking for a drop of more than 1.71% to follow the previous eight straight quarters of negative growth. Regions affected by Hurricanes Helene and Milton boosted sales growth by 60 basis points, while higher foot traffic, up 7.6%, and an uptick in the average ticket size, up 0.3%, also contributed.

Feldman noted that pro categories such as roofing, drywall, and lumber also boosted results. E-commerce sales, which increased 9%, saw strength as well.

The results exceeded company expectations with “greater engagement in home improvement spend, despite ongoing pressure on large remodeling projects,” Home Depot CEO Ted Decker said in the release.

Read more: Best credit cards for home improvement

In fiscal 2024, net sales grew 4.5% year over year to $159.51 billion, above Wall Street’s expectations. Same-store sales dropped for the full year, down 1.8%.

Here’s what Home Depot reported for its fourth quarter results, compared to Wall Street estimates compiled by Bloomberg:

• Revenue: $39.7 billion, versus $39.13 billion

• Adjusted earnings per share: $3.13, versus $3.04

• Same-store sales growth: 0.8%, versus -1.72%

• Foot traffic: +7.6%, versus -1.02%

• Average ticket size: +0.3%, versus -0.35%

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