The Home Depot beat Wall Street expectations in the fourth quarter, even as a sluggish US housing market continued to weigh on larger discretionary projects.
Fourth-quarter sales fell 3.8% year over year to $38.2 billion. The prior-year period included an extra week that contributed roughly $2.5 billion in sales. Comparable sales rose 0.4%, with US comps up 0.3%.
Profitability declined. Net income dropped 14.2% to $2.6 billion, while operating income fell 14.4% to $3.8 billion. For the full fiscal year 2025, net income decreased 4.4% to $14.2 billion and operating income slipped 3% to $20.9 billion.
Full-year sales rose 3.2% to $164.7 billion. Comparable sales increased 0.3%, with US comps up 0.5%.
Executive vice president of merchandising Billy Bastek said the retailer posted positive comps in eight of its 16 merchandising departments in Q4, including power, electrical, storage, indoor garden and hardware.
However, big-ticket discretionary categories remained under pressure as housing turnover stayed near historic lows.
Related Story
According to GlobalData, housing transactions declined 6.3% year over year in the fourth quarter, dampening demand tied to home purchases and sales.
CEO Ted Decker said muted turnover is also disrupting replacement cycles. Customers anticipating a move are opting to repair rather than replace certain items, limiting spend on larger projects.
Trade policy remains another variable. Although the Supreme Court of the United States recently ruled against President Donald Trump’s use of the International Emergency Economic Powers Act to impose open-ended tariffs, executives said they are still assessing potential impacts.
More than half of Home Depot’s assortment is sourced domestically and has not been subject to tariffs, the company said, adding that most tariff-related pricing actions tied to earlier measures are largely complete.
For fiscal 2026, Home Depot reaffirmed guidance for total sales growth of 2.5% to 4.5% and comparable sales ranging from flat to up 2%. Capital expenditures are expected to represent about 2.5% of sales, with plans to open 15 new stores.
Click here to sign up to Retail Gazette‘s free daily email newsletter
