Home Depot, Inc. (HD.US)2026 Fiscal Year Outlook Falls Short of Expectations, Pre-Market Stock Price Drops Accordingly.

Home Depot, Inc. (HD.US), a home improvement retail company, has reiterated its financial guidance for the fiscal year 2025 and has provided a preliminary outlook for the fiscal year 2026 for the first time. According to the announcement, the company expects a decrease of approximately 5% in adjusted diluted earnings per share for the fiscal year 2025 compared to the previous year's $15.24, with total sales expected to increase by around 3%. Comparable sales growth is forecasted to achieve a slight increase after adjusting for external factors such as store count changes. Additionally, the company has provided a preliminary outlook for the fiscal year 2026, expecting adjusted diluted earnings per share to stay flat or increase by 4%, with the market generally expecting a growth of around 5%. Total sales are forecasted to increase by approximately 2.5% to 4.5%, with analysts generally expecting a growth of about 4.5%. Comparable sales growth is projected to range between flat and 2%, with analysts predicting a growth of around 3%. It is worth noting that Home Depot, Inc. has also outlined a potential market recovery scenario: if the housing activity recovers, total sales could increase by about 5%-6%, comparable sales by 4%-5%, operating profit growth exceeding sales growth, and earnings per share achieving high single digit growth. Richard McPhail, the company's Chief Financial Officer, stated: "Our market recovery scenario reflects our performance expectations when housing activity gains momentum, and performance is driven by increased spending on large projects fueled by pent-up demand. We believe that the pressure in the housing sector will self-correct and provide growth support faster than the overall economy for the home improvement market, and we expect to continue to grow at a pace faster than the market." McPhail added: "In an accelerated recovery scenario, if the real estate market recovery is stronger, the growth rate of sales and earnings per share may be faster." Due to Home Depot, Inc.'s preliminary outlook for the fiscal year 2026 being generally below market expectations, as of the time of writing, its stock price has dropped by 2.10% in pre-market trading, closing at $342.55.