House Depot (HD) is bracing for a transitional 2026. Whereas the retailer has struggled to develop its enterprise as dwelling gross sales have stagnated and owners have retrenched, its 2026 outlook got here in above Wall Road’s estimates, sending shares greater.
Administration expects complete gross sales progress of two.5% to 4.5% for the brand new fiscal 12 months, with comparable gross sales anticipated to be flat to up 2%.
The outlook suggests House Depot’s 2026 income will develop from $164.7 billion in 2025 to a variety of $170.5 billion to $172.1 billion. The excessive finish of its forecast is above Wall Road analysts’ consensus estimate of $171.2 billion.
Most significantly for buyers, the corporate expects adjusted earnings per share to develop 4%, signaling a transfer to guard margins whilst big-ticket DIY tasks stay below stress on account of a frozen housing market.
House Depot’s revenue steering suggests EPS of $15.28, up from $14.69 in 2025, and above the analysts $15.05 consensus estimate.
House Depot provided higher steering for 2026 than Wall Road anticipated.
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The ‘Locked-In’ housing actuality
House Depot’s cautious outlook is rooted in a housing market that is still functionally “frozen” for the typical shopper.
Regardless of mortgage charges stabilizing close to 6.01% in February 2026—the bottom stage in over three years—present dwelling gross sales plunged 8.4% in January, in response to the Nationwide Affiliation of Realtors.
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This paradox is pushed by the “lock-in” impact: hundreds of thousands of householders are tethered to pandemic-era mortgage charges of three% or decrease, making them reluctant to promote and transfer.
Quick truth: 20% of all mortgages are locked in at charges beneath 3% and 51% are beneath 4%, in response to Realtor.com.
With the typical house owner now staying of their property for 8.5 years, the longest tenure in a quarter-century, the everyday “new home” renovation cycle has stalled. This has pressured House Depot to pivot its technique towards upkeep and professional-grade tasks quite than consumer-led remodels.
It has been powerful going for House Depot
The house enchancment sector spent a lot of 2025 navigating a “K-shaped” restoration.
Actual disposable earnings grew by roughly 1% 12 months over 12 months in December, but shopper confidence has hovered close to multi-year lows, in response to The Convention Board, main many to swap main renovations for smaller, important repairs.
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“During the fourth quarter, we continued to see a resilient customer, though many continue to delay larger discretionary projects in this higher-for-longer interest rate environment,” mentioned CEO Ted Decker.
Regardless of rallying 16% since September’s low, House Depot’s inventory value is about the place it was buying and selling within the Fall of 2024, suggesting many buyers underperformed the broader market as the corporate’s gross sales and earnings progress stagnated.
The transfer up since September displays optimism that decrease rates of interest will stimulate housing, boosting house owner spending on dwelling enchancment.
“We continue to believe the broader home improvement space will see sequential improvement in 1H 2026 as it emerges from the post-COVID demand pull-forward hangover from the last 3 years,” mentioned David Wagner, Head of Fairness and Portfolio Supervisor at Aptus Capital Advisors.
It additionally displays potential upside from House Depot’s $18.25 billion acquisition of SRS Distribution, which is pivoting gross sales towards the arguably extra secure “Pro” contractor market, serving to scale back its reliance solely on DIY consumers.
“We are encouraged by the momentum in our Pro ecosystem and the integration of SRS, which we believe positions us to take share in a recovering market,” mentioned Decker.
House Depot’s This autumn earnings backdrop
House Depot’s steering overshadowed 1 / 4 that was technically a “beat” however confirmed the scars of a shorter fiscal calendar.
- This autumn Income: $38.2 billion (Down 3.8% YoY*)
- Adjusted Earnings: $2.72 per share (Down 13.1%), however above $2.58 estimates.
- Working Margin: 10.5% (Down from 11.7% YoY)
- Comparable Gross sales: Up 0.4%, versus 0.8% final 12 months; above -0.4% estimates.
- Comparable Buyer Transactions: Down 1.6% YoY, versus up 0.6% final 12 months.
*Observe: This autumn 2024 included an additional week, which added $2.5 billion in gross sales
These outcomes have been ok to ship House Depot shares 2% greater, however whether or not shares can proceed to climb this 12 months will rely largely on whether or not the frozen housing market thaws due to decrease mortgage and fairness mortgage charges.
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