Home Depot (HD.US)'s outlook for the 2026 fiscal year falls short of expectations, and the stock price declined in response to pre-market expectations

The Zhitong Finance App learned that the home building materials retailer Jia Depot (HD.US) has reaffirmed its fiscal year 2025 performance guidelines and revealed the initial outlook for fiscal year 2026 for the first time.

According to the announcement, the company expects the adjusted diluted earnings per share for fiscal year 2025 to decrease by about 5% compared to the previous fiscal year of $15.24, and total sales are expected to increase by about 3%. After excluding external factors such as changes in the number of stores, same-store sales are expected to increase slightly in 52 weeks.

In addition, the company also gave a preliminary outlook for the 2026 fiscal year. The adjusted diluted earnings per share are expected to remain flat to increase by 4%, and the market generally expects an increase of about 5%; total sales increase of about 2.5% to 4.5%, and analysts generally expect an increase of about 4.5%; comparable sales growth is between a flat and 2% increase, and analysts generally expect an increase of about 3%.

It is worth mentioning that Home Depot also depicts a potential market recovery scenario: if housing activity recovers, total sales will increase by about 5% to 6%, comparable sales will increase by 4% to 5%, operating profit growth will exceed sales, and earnings per share will grow in the middle to high digits.

Richard McPhail, the company's chief financial officer, said: “Our market recovery scenario reflects our performance expectations when housing activity gains momentum and spending on large-scale projects is driven by pent-up demand. We believe the pressure in the housing sector will correct itself and support the home improvement market to grow faster than the overall economy, and we expect it to continue to grow faster than the market.”

McPhail added: “In an accelerated recovery scenario, sales and earnings per share could grow faster if the real estate market recovers more strongly.”

Affected by the fact that Home Depot's initial outlook for the 2026 fiscal year was generally lower than market expectations, as of press release, its stock price fell 2.10% in the premarket to close at $342.55.