Home Depot Cuts Annual Profit Forecast

The revised forecast now anticipates adjusted earnings per share to decline by as much as 5% from the previous year, a more pessimistic outlook than initially projected. This adjustment reflects a consumer base that is increasingly hitting the pause button on big-ticket home purchases and large-scale renovations. A key factor is the cooling U.S. housing market, where higher mortgage rates and elevated home prices have led to a "lock-in effect." With fewer people moving, there's a reduction in the typical pre-sale renovations and post-purchase customizations that drive a significant portion of home improvement spending. The slowdown is not isolated to Home Depot. Rival Lowe's also provided a cautious forecast, citing similar pressures on do-it-yourself (DIY) customers who are deferring major projects like kitchen remodels. This points to a broader trend of consumer uncertainty across the home improvement sector. Home Depot's leadership noted that an expected pickup in demand from easing interest rates failed to materialize. For its most recent reported quarter, the company's comparable sales saw only a slight increase, while customer transactions declined, indicating that fewer shoppers are visiting stores. In response to economic pressures, homeowners are shifting their spending priorities. There is a clear trend away from large, discretionary projects towards smaller-scale, essential maintenance and repair tasks. Most homeowners are now planning to spend under $5,000 on projects in the coming year. For the upcoming fiscal year 2026, Home Depot anticipates comparable sales to be anywhere from flat to a modest 2% growth. Executives have stated they have not yet seen a clear catalyst that would signal an inflection point in housing and big-ticket project activity.