Home Depot warned that its 2025 adjusted earnings per share will fall 5%|Mike Mozart|CC BY 2.0
Home Depot cut its full-year profit forecast following weak Q3 sales, driven by slower home-improvement demand, cautious consumer spending, and unusually low storm activity, which led to fewer home remodels.
The retailer now expects full-year sales to rise about 3%. It reported a revenue of $41.35 billion, narrowly beating the $41.10 billion expected.
Comparable sales rose 0.2% in the third quarter, far below the 1.4% forecast. It also warned that its 2025 adjusted earnings per share will fall 5%.
CEO Ted Decker said storm-related categories were significantly weaker than last year and the pressure will continue into the next quarter. Chief Financial Officer Richard McPhail told CNBC that homeowners have been in a “deferral mindset” since the middle of 2023.
Additionally, high interest and mortgage rates are also keeping many away from big renovation projects that often require financing.
Home Depot stock fell 6% Tuesday and is down 13% so far this year. Other retailers like Target and Walmart are reporting earnings this week, which could shed light on overall US consumer spending.