Home Depot gives a tepid forecast
- Kevin W. Frisz
- Dec 9, 2025
- 2 min read
December 9, 2025
Home Depot expects same store sales growth of 0-2%
Home Depot (HD) is the 23rd largest stock in the index and the 3rd largest stock in the consumer discretionary sector. So their performance and outlook can have an effect on the market overall. At the very least, they provide an interesting read into current consumer sentiment.
HD held its annual analyst day today. This is not a shareholder meeting. Once a year or so, some companies will host an “analyst day” for Wall Street analysts, mutual fund managers, hedge fund analysts, and the like. The company will bring out the faces from back at headquarters that you don’t normally see. These folks will explain why their company is “innovative” and has strong “competitive advantages” and is preparing to conquer their industry. That presentation is kinda interesting. But not super useful for our purposes.
For our purposes, management gave a first look at sales growth for 2026. And it was not great. Home Depot expects same store sales growth of 0-2% next year.
Compare that to nominal GDP growth of 4-5%. Management made a list of short-term pressures that are holding back professional remodelers. I copied that list below.
Echoing the consumer confidence surveys in general, Home Depot's network of professional remodelers cite "consumer uncertainty" as the primary hesitation for deferred home remodeling projects.
As we all know, Home Depot sells lots of things - lumber, hammers, ceiling fans, etc. But what you may not know is that Home Depot (and Lowe's) makes the bulk of its profits in the back of the store. In the home remodeling section. That's where the significant profit margin sales come from. So that's why they gave it extra attention at their analyst day.
HD stock has underperformed the market in 6 of the last 8 years. HD (and other housing-related stocks) got a boost in 2021 from Covid-era lockdowns. But outside of that period, the shares have been lagging. [Past performance is no guarantee of future success.]
Comments