Home Depot, Inc. (HD.US) Q4 comparable sales exceeded expectations with a 0.4% increase, showing resilience in home improvement demand amid economic "chill".

Notice that, driven by strong demand, Home Depot, Inc. (HD.US) exceeded key sales metrics, but the retailer also warned that macro challenges still exist. The financial report shows that Home Depot, Inc. achieved revenue of $38.2 billion in the fourth quarter, a year-on-year decrease of 3.8%, exceeding expectations by $100 million; adjusted earnings per share were $2.72, exceeding expectations by $0.20. In the fiscal quarter ending on February 1, same-store sales, which measure the performance of stores open for at least one year, increased by 0.4%, surpassing the average expected value. These results indicate that despite high interest rates and ongoing inflation concerns, demand for home improvement projects remains stable. Home Depot, Inc. said that the company has gained more market share, while e-commerce has achieved double-digit growth for three consecutive quarters. However, substantial changes in housing demand have not yet materialized. The company expects total sales to increase by approximately 2.5% to 4.5% year-on-year in the 2026 fiscal year, lower than the previously estimated 4.06% year-on-year growth rate. Same-store sales growth is expected to be between 0% and 2.0%. Chief Financial Officer Richard McPhail said in an interview, "Our customers have been holding back on large renovation projects for a full three years. Although homeowners are currently one of the healthiest consumer groups, they tell us that uncertainty is increasing, and people are worried about housing affordability and the risk of job loss." There are some early positive signs in the housing market: mortgage rates have fallen slightly, and the median house price has remained relatively stable over the past year. McPhail said that mortgage rates need to fall further and income levels must grow more significantly for growth to accelerate. He said, "Everything is moving extremely slowly in the right direction, but we have not yet seen a catalyst that could change the demand for home improvements." Home Depot, Inc. reaffirmed its full-year performance forecast. Consumer confidence is volatile, housing affordability challenges persist, and U.S. job growth almost stagnated last year. After the Supreme Court overturned President Trump's broad global taxation plan last week, the U.S. tariff policy is once again in flux. Trump promised to impose new taxes, but questions remain about the level of tariffs, the implementation method, and the duration. McPhail said that Home Depot, Inc. is analyzing the potential impact of these changes. He added that the company has largely absorbed the impact of tariffs before the latest statement was released. As a result of recent price increases, prices for some goods will "slightly" rise in the first half of this year. Executives at Home Depot, Inc. said at an investor day in December last year that pent-up potential demand since 2023 will eventually spending. During a long period of business slowdown, Home Depot, Inc. has been focusing on its faster-growing professional contractor business, which spends more than regular customers. In addition, the company is seeking to expand its digital business and provide an AI-enhanced shopping experience. In response to tariffs, Home Depot, Inc. has implemented a strategy of diversifying sourcing. The retailer recently cut corporate positions and asked employees to return to the office to seek growth recovery. Additionally, the company tightened standards for management bonus payouts. Home Depot, Inc. is the latest large retailer to release earnings in this financial reporting season, with its main competitor, Lowe's Companies, Inc., scheduled to release earnings on Wednesday. Walmart Inc. gave a conservative outlook last week, citing fluid economic conditions. However, Walmart Inc. also noted that consumer spending habits remain consistent and price increases in many product categories are trending towards normalization.