HD Stock Drops Premarket On Lower Profit Guidance – CEO Says Demand Uptick Did Not Arrive

• The home improvement chain now sees fiscal 2025 comparable sales growth to be slightly positive, compared with the previous estimate of a 1% rise.
• Decker said the company’s third-quarter results missed its expectations primarily due to the lack of storms in the third quarter, which resulted in greater-than-expected pressure in certain categories.
• Home Depot’s quarterly adjusted EPS was $3.74, missing estimates of $3.85.

Home Depot (HD) stock fell nearly 2% in premarket trading on Tuesday after the home improvement giant cut its annual profit outlook and noted a failure to see the demand acceleration it had expected in the third quarter. 

CEO Ted Decker said that this came even as underlying demand in the business remained relatively stable sequentially.

“We believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand," Decker added.

Heading into the quarterly report, Telsey Advisory Group analyst Joseph Feldman said that at some point in the next year, the firm expects consumers to stop putting off larger projects as the Fed has resumed cutting the Fed Funds rate. 

Fiscal 2025 Forecast

Home Depot became the top trending ticker on Stocktwits. Home Depot now expects adjusted earnings per share (EPS) to decline approximately 5%, compared with the prior forecast of a 2% fall.

The home improvement chain now sees fiscal 2025 comparable sales growth to be slightly positive, compared with the previous estimate of a 1% rise.

The company expects annual total sales growth of approximately 3%, with the GMS acquisition expected to contribute nearly $2 billion in incremental sales.

Feldman had noted that Telsey expects a healthier home improvement environment in 2026, with Home Depot generating both sales and earnings growth.

Home Depot’s Q3 Results

"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,” Decker said.

Home Depot’s third-quarter net sales came in at $41.35 billion, compared with Wall Street expectations of $41 billion, according to data compiled by Fiscal AI. Its quarterly adjusted EPS was $3.74, missing estimates of $3.85.

What Is Retail Thinking?

Retail sentiment on Home Depot improved to ‘extremely bullish’ from ‘bullish’ territory compared to a day ago, with message volumes at ‘high’ levels, according to data from Stocktwits.

Shares of Home Depot have declined nearly 12% in the last 12 months. 

Also See: Microsoft’s Azure, Amazon’s AWS Come Under EU’s Digital Markets Act Scanner For Potential Curbs

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