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Home Depot Issues Cautious 2026 Outlook
Retailer Sees Flat to Modest Sales Growth as Housing Market Slows
Key Takeaways:
- Home Depot issued cautious preliminary 2026 guidance with comparable sales expected to be flat to up 2%, below analyst estimates.
- The company said high interest rates and a weak housing market continue to curb big-ticket spending, while offering a higher 4% to 5% growth scenario if housing activity rebounds.
- Home Depot, which holds an investor day on Dec. 9, maintained its fiscal 2025 guidance as it expands online offerings and services for professional contractors.
Home Depot Inc. is offering cautious preliminary guidance for next year, a sign that the home-improvement retailer doesn’t anticipate the housing market to rebound in the short term.
The company expects comparable sales growth to be in a range of flat to up 2% for the year — below the average of estimates compiled by Bloomberg. Comparable sales are a key gauge of performance for the industry. Home Depot also gave projections for total sales growth that were below estimates.
Home Depot ranks No. 54 on the Transport Topics Top 100 list of the largest private companies in North America.
The U.S. housing market has weighed on Home Depot as high interest rates prompt consumers to remain on the sidelines for big-ticket purchases and projects that require financing. While mortgage rates are lower than they were a year ago, Americans have been cautious amid higher costs across the economy. Home prices also remain high, meaning that housing has become more out-of-reach for a large portion of the population.
Home Depot, which will host an investor day with analysts on Dec. 9, also provided a “market recovery” case that spells out higher growth when the company sees housing activity and spending pick up. In such a scenario, comparable sales are expected to rise in a range of 4% to 5%.
“We believe that the pressures in housing will correct and provide the home improvement market with support for growth faster than the general economy,” Chief Financial Officer Richard McPhail said in the statement. He added that Home Depot expects “to continue to grow faster than our market.”
In its latest earnings report, Home Depot said an expected rebound in demand hadn’t materialized, sparking declines in its shares. The stock has dropped 10% so far this year through close Dec. 8, compared with a 16% gain for the S&P 500 Index. Home Depot edged down 0.8% in premarket trading Dec. 9.
Home Depot’s results have contrasted with those of other large retailers such as Walmart Inc., which have maintained growth despite challenges in the U.S.
During the ongoing slowdown in results, Atlanta-based Home Depot has boosted its online offerings and expanded its business catering to professional contractors, who frequently spend more than do-it-yourself customers.
The company maintained its guidance for fiscal 2025.
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