FMP
Home Depot (HD) Posts Strong Q4 Sales, But 2025 Outlook Falls Short
Feb 26, 2025 6:51 AM - Parth Sanghvi
Image credit: Thayran Melo
Home Depot (NYSE:HD) delivered better-than-expected fourth-quarter earnings, but its 2025 comparable sales forecast missed analyst expectations as higher interest rates continue to weigh on home improvement demand.
Key Takeaways from Home Depot's Earnings
š Q4 Sales Beat Estimates
- Net sales: $39.70 billion (+14% YoY), beating Wall Street estimates of $39.13 billion.
- Adjusted EPS: $3.13 (vs. expected $3.04).
- Sales benefited by ~$2.5 billion due to an extra week in the quarter.
š 2025 Outlook Misses Expectations
- Home Depot forecasts 1% comparable sales growth for 2025, below Bloomberg's 1.65% estimate.
- Higher interest rates have dampened renovation spending, despite Fed easing cycles in 2024.
- Uncertainty over potential tariffs from President Trump's policies could impact inflation and Fed rate decisions.
Market Implications & Analysis
š” Interest Rate Sensitivity
- Higher borrowing costs have weighed on home improvement demand.
- Fed's wait-and-see approach on rate cuts adds further uncertainty.
š Home Improvement & Retail Sector Insights
- Investors can track Home Depot's financial health using the Company Rating API.
- Sector Historical Overview API provides insights into broader retail trends amid economic shifts.
While Home Depot's strong Q4 results provide resilience, its muted 2025 outlook suggests ongoing macroeconomic headwinds in the home improvement sector.
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