Home Depot reported a mixed fourth quarter with declining sales and net earnings, impacted by a shorter fiscal week and ongoing consumer pressures. Despite these headwinds, the company demonstrated resilience by growing market share and providing guidance for fiscal 2026 that anticipates modest sales and EPS growth.
Fiscal 2025 sales increased 3.2% to $164.7 billion, with comparable sales up 0.3%.
positiveThe company announced a 1.3% increase in its quarterly dividend to $2.33 per share, marking the 156th consecutive quarter of dividend payments.
positiveProvided fiscal 2026 guidance projecting total sales growth of 2.5% to 4.5% and adjusted operating margin of 12.8% to 13.0%.
positiveFourth quarter net sales decreased 3.8% to $38.2 billion, impacted by a 14th week in the prior year which added $2.5 billion in sales.
attentionFourth quarter net earnings decreased 14.2% to $2.6 billion, with diluted EPS falling 14.6% to $2.58.
negativeAdjusted diluted EPS for Q4 FY2025 decreased 13.1% to $2.72, compared to $3.13 in the prior year, also impacted by the 14th week in FY2024.
negativeMerchandise inventories increased to $25.8 billion from $23.5 billion YoY, a 9.6% increase outpacing the 3.2% full-year sales growth.
attentionOperating income for the full fiscal year decreased 3.0% to $20.9 billion, and operating margin compressed from 13.5% to 12.7%.
negativeThe company's fiscal 2026 guidance for comparable sales growth is between flat and 2.0%, indicating a continued slowdown from prior periods.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.
Throughout fiscal 2025, our teams did an incredible job engaging with our customers and growing market share, and I would like to thank them for their hard work and dedication.
For the fourth quarter, our results were largely in-line with our expectations, reflecting the lack of storm activity in the third quarter and ongoing consumer uncertainty and pressure in housing.
Adjusting for storms, underlying demand was relatively stable throughout the year.
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Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.