Home Depot Inc
Q3 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +3.11%.
Did HD Beat Earnings? Q3 2026 Results
Home Depot delivered a mixed third quarter for fiscal 2025, posting adjusted diluted EPS of $3.74 that missed the $3.83 consensus estimate by 2.45%, even as revenue of $41.35 billion edged past expectations by 0.56% and grew 2.8% year-over-year. The key culprit behind the earnings shortfall was a combination of absent storm activity, persistent housing market pressure, and a consumer spending environment that has yet to recover its appetite for big-ticket home improvement projects, with comparable sales barely turning positive at 0.2%. The recently acquired GMS Inc. contributed roughly $900 million in incremental revenue over approximately eight weeks, helping lift the top line even as acquisition-related amortization of $158 million weighed on margins, compressing adjusted operating margin to 13.3% from 13.8% a year ago. Looking ahead, management now expects total sales to grow approximately 3.0% for fiscal 2025, with adjusted diluted EPS declining roughly 5.0% from last year's $15.24, a guidance reset that prompted at least one major Wall Street firm to trim its price target while maintaining a buy rating.
- GMS acquisition contributed approximately $900 million in sales over ~8 weeks in Q3
- Comparable average ticket increased 1.8% year-over-year
- Lack of storm activity in Q3 created greater than expected pressure in certain categories
- Comparable customer transactions declined 1.6%
- Consumer uncertainty and continued housing pressure disproportionately impacting home improvement demand
- Expected demand increase in Q3 did not materialize
“Our results missed our expectations primarily due to the lack of storms in the third quarter, which resulted in greater than expected pressure in certain categories. Additionally, while underlying demand in the business remained relatively stable sequentially, an expected increase in demand in the third quarter did not materialize. We believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand.”
Home Depot CEO, on the earnings call
Forward Guidance & Outlook
The Home Depot updated fiscal 2025 guidance reflecting Q3 performance shortfall, continued pressure from lack of storm activity, ongoing consumer uncertainty, and housing pressure, plus the inclusion of GMS. Full-year outlook includes: total sales growth of approximately 3.0% (with GMS contributing ~$2.0 billion in incremental sales), slightly positive comparable sales for the 52-week period, approximately 12 new stores, gross margin of approximately 33.2%, GAAP operating margin of approximately 12.6%, adjusted operating margin of approximately 13.0%, tax rate of approximately 24.5%, net interest expense of approximately $2.3 billion, diluted EPS to decline approximately 6.0% from $14.91 in fiscal 2024, and adjusted diluted EPS to decline approximately 5.0% from $15.24 in fiscal 2024. Capital expenditures expected at approximately 2.5% of total sales.
HD YoY Financials
Figures from SEC filings and company reports. Not investment advice.