Home Depot Reaffirms Outlook, Bets On Housing Recovery To Lift Growth

Floor & Decor +4.34%
Home Depot, Inc. +0.97%
Lowe's Companies, Inc. +0.78%
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Home Depot, Inc.

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Lowe's Companies, Inc.

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The Home Depot, Inc. (NYSE:HD) will use its 2025 Investor and Analyst Conference on Tuesday to outline its strategic priorities, reaffirm its fiscal 2025 outlook, and establish an early baseline for fiscal 2026, including a scenario that assumes a housing-led increase in demand.

The company said the event begins at 8:30 a.m. The event will be available via webcast with a replay.

Management said the company will outline how it is uniquely positioned to gain market share and create shareholder value by executing a strategy focused on strengthening its core and culture, delivering a seamless, interconnected customer experience, and winning in the “pro” segment.

Also Read: Home Depot Faces Slower Demand — But Analysts Still Call It A Long-Term Winner

CEO Ted Decker said investments made in recent years have strengthened the retailer’s position as it competes for share in what he pegged as an approximately $1.1 trillion market.

Fiscal 2025 Outlook Holds

Home Depot reiterated its fiscal 2025 expectations, including about 3% total sales growth and slightly positive comparable sales on a comparable 52-week basis.

The company also maintained its margin and spending targets, calling for a gross margin of around 33.2%, an operating margin of nearly 12.6%, capital expenditures of about 2.5% of sales, and a net interest expense of roughly $2.3 billion.

On the bottom line, Home Depot still expects diluted earnings per share to fall about 6% from fiscal 2024’s $14.91, while adjusted diluted EPS is projected to decline about 5% from $15.24. The company noted it also reports certain non-GAAP measures alongside GAAP results.

Early Fiscal 2026 Range

For fiscal 2026, Home Depot outlined a preliminary view that assumes the home-improvement market ranges from down 1% to up 1%.

Within that backdrop, the company expects comparable sales to be roughly flat to up 2% and total sales growth of about 2.5% to 4.5%.

The operating margin is projected to be approximately 12.4% to 12.6%, with diluted EPS expected to remain flat or increase by up to 4%.

Housing-Rebound “Recovery Case”

CFO Richard McPhail said a better housing environment and renewed spending on larger projects could lift results. Under the company’s “Market Recovery Case,” Home Depot anticipates total sales to rise by about 5% to 6% and comparable sales by about 4% to 5%, with operating profit outpacing sales growth and EPS increasing in the mid- to high-single digits.

HD Price Action: Home Depot shares were down 2.11% at $342.51 during premarket trading on Tuesday, according to Benzinga Pro data.

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