Home Depot reaffirms annual forecasts on demand from professional customers

By Savyata Mishra

Feb 24 (Reuters) – Home Depot topped estimates for fourth-quarter results and maintained its annual forecasts, as the home-improvement chain operator benefited from resilient demand from professional contractors and minor repairs by budget-strapped customers.

Its shares were up nearly 3% in premarket trading on Tuesday. Shares of rival Lowe’s, which reports quarterly results a day later, were up 1%.

Home Depot has leaned on professional (Pro) customers, such as contractors, builders and carpenters, whose large, ongoing jobs have helped the company offset the slowdown in big do-it-yourself remodels amid elevated borrowing costs and a weak U.S. housing market. 

The company has rolled out new credit and project-planning tools that help Pros manage larger and more complex jobs, while broadening support through its outside-sales network.

Chief Financial Officer Richard McPhail said U.S. consumers and the company have been operating in what he described as a “frozen housing environment” since 2023 and that conditions have yet to show meaningful improvement. 

The past year has brought added strain as shoppers grew more uncertain, he added, pointing to a steady decline in consumer confidence.

Atlanta-based Home Depot reported a 0.4% rise in same-store sales for the three months ended February 1, compared with analysts’ expectations of largely flat sales, according to data compiled by LSEG.

“In Q4, performance trends suggest consumers are prioritizing repair and upkeep over big-ticket remodel activity,” said Michael Gunther, vice president of research and market intelligence at Consumer Edge.

TARIFFS WATCH

“We’re still analyzing the impacts of the Supreme Court’s decision and new tariff announcements,” a company spokesperson told Reuters. 

The U.S. has imposed a new tariff of 10% from Tuesday on all goods not covered by exemptions, the Customs and Border Protection said. 

President Donald Trump on Friday announced a new temporary global tariff of 10% after the U.S. Supreme Court ruled against his duties. Trump said on Saturday he would raise the tariff to 15%.

Over half of Home Depot’s goods are sourced in the U.S., and over the last year the company has selectively raised prices to protect its margins from tariff-driven costs. 

Home Depot earned $2.72 per share on an adjusted basis in the fourth quarter, surpassing analysts’ expectations of $2.54. 

Average ticket size, or the average amount spent per transaction by a customer, increased 2.4% to $91.28 in the quarter from a year earlier, even as customer transactions fell 8.5% to 366.5 million.

Home Depot maintained its fiscal year 2026 comparable sales forecast of flat to 2% jump and adjusted earnings per share to be flat to 4% higher from a year earlier.

(Reporting by Savyata Mishra in Bengaluru; Editing by Sriraj Kalluvila)