Home Depot stock falls after company cuts full-year outlook as consumers postpone home improvement projects
Home Depot (HD) stock fell 4% early Tuesday after the home improvement retailer reported lower-than-expected third-quarter results and lowered its full-year outlook as the U.S. housing market remains sluggish.
The company expects same-store sales for the full year to be “slightly positive”, compared to previously expecting a 1% increase for 2025.
Full-year earnings are also expected to fall more sharply, with adjusted earnings per share expected to fall 5%, more than the 2% drop the company expected in August.
In the third quarter, the company’s adjusted EPS came in at $3.74, missing expectations for earnings per share of $3.84, according to Bloomberg data. Revenue came in at $41.4 billion, ahead of forecasts of $41 billion.
Same-store sales increased 0.2% overall and 0.1% in the United States. The Street expects same-store sales to rise closer to 1.3% in the third quarter.
In the company’s statement, CEO Ted Decker said third-quarter results were lower than expected, “primarily due to the lack of storms in the third quarter, which resulted in greater than expected pressure in some categories.”
Telsey Advisory Group’s Joe Feldman wrote in a note to clients Tuesday that “the result and guidance reduction are disappointing, given feedback last quarter that home improvement demand for small repair and maintenance projects was picking up.”
Feldman continues to believe that “the company will benefit from the recovery in housing demand.”
Home Depot’s results come as mortgage rates remain stubbornly high, pushing more Americans to stay in their current living situations, while a slowing job market has also put pressure on demand for large-scale remodeling projects critical to the company’s bottom line.
“Although underlying demand in the business remained relatively stable sequentially, the expected increase in demand in the third quarter did not materialize,” Decker said in the release.
“We believe consumer uncertainty and continued housing pressure are having a disproportionate impact on home improvement demand.”
Brooke DiPalma is a reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email him at bdipalma@yahoofinance.com.
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