Home Depot tops expectations in the fourth quarter, but customers pull back on spending

Published: Tuesday, February 24, 2026 at 12:23 pm

Home Depot Beats Expectations Despite Consumer Spending Slowdown

Home Depot, the home improvement retail giant, reported fourth-quarter earnings that exceeded Wall Street's expectations, despite a challenging economic environment. The company's earnings for the three months ending February 1st reached $2.57 billion, or $2.58 per share. When excluding one-time factors, earnings per share were $2.72, surpassing analyst projections of $2.53. While this represents a decrease from the $3 billion, or $3.02 per share, earned in the same period a year prior, the results were still positive.

Revenue for the quarter totaled $38.2 billion, a decrease from $39.7 billion a year earlier. This decline was partially attributed to an extra week in the prior fiscal year. However, the company still managed to outperform expectations, with Wall Street anticipating revenue of $38.09 billion.

A key indicator of a retailer's performance, sales at stores open at least a year, saw a modest increase of 0.4%. In the United States, comparable store sales climbed 0.3%. Home Depot's Chair and CEO, Ted Decker, noted that the results aligned with expectations, reflecting the absence of significant storm activity and ongoing consumer uncertainty.

The report also highlighted a 1.6% decrease in customer transactions during the quarter. However, the average amount spent per receipt increased to $91.28, up from $89.11 a year earlier. This reflects a trend of consumers being more cautious with their spending amidst concerns about inflation and economic uncertainty.

The broader economic landscape paints a similar picture. U.S. consumer confidence declined sharply in January, reaching its lowest point since 2014. Sales of existing homes also experienced a significant drop, falling 8.4% in January, marking the largest monthly decline in nearly four years. The housing market has been in a slump since 2022, impacted by rising mortgage rates.

Looking ahead, Home Depot anticipates adjusted earnings for fiscal 2026 to be approximately flat to up 4% from fiscal 2025's $14.69 per share. The company projects total sales growth of about 2.5% to 4.5% and comparable sales growth to be approximately flat to up 2%.

BNN's Perspective: While Home Depot's performance is encouraging, the underlying economic trends suggest a cautious outlook. The company's ability to exceed expectations despite a challenging environment demonstrates resilience. However, the decline in consumer confidence and the housing market slump are concerning signals that could impact future growth. The company's projections for the coming year reflect this uncertainty, with modest growth expectations.

Keywords: Home Depot, earnings, revenue, sales, consumer spending, inflation, housing market, comparable sales, Ted Decker, economic uncertainty, fourth quarter, stock market, financial results, retail, consumer confidence

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