The Home Depot Provides a Strategic Update; Reaffirms Fiscal 2025 Guidance; Establishes a Preliminary Fiscal 2026 Outlook and a Market Recovery Case

Rhea-AI Summary

The Home Depot (NYSE: HD) held its 2025 Investor and Analyst Conference on Dec. 9, 2025 and reaffirmed fiscal 2025 guidance while providing a preliminary fiscal 2026 outlook and a Market Recovery Case.

FY2025 guidance: total sales growth ~3%, GMS adds ~$2B, ~12 net new stores, gross margin ~33.2%, operating margin ~12.6% (adjusted ~13.0%), diluted EPS down ~6% to $14.02, adjusted EPS down ~5%, net interest ~$2.3B, capex ~2.5% of sales.

FY2026 outlook: market -1% to +1%, comp sales flat to +2%, total sales +2.5%–4.5%, operating margin 12.4%–12.6%, adjusted EPS flat to +4%. Market Recovery Case: sales +5%–6%, comps +4%–5%, mid‑to‑high‑single‑digit EPS growth.

Positive

• GMS contribution of approximately $2 billion to sales in FY2025
• Preliminary FY2026 total sales outlook of +2.5% to +4.5%
• Market Recovery Case with potential 5%–6% total sales growth

Negative

• Diluted EPS expected to decline ~6% in FY2025 versus fiscal 2024
• Home improvement market outlook for FY2026 of -1% to +1% indicating limited near‑term demand
• Net interest expense of approximately $2.3 billion in FY2025

Key Figures

Total addressable market $1.1 trillion Home improvement market opportunity cited in strategic update

FY2025 sales growth 3% Reaffirmed total sales growth guidance for fiscal 2025 (52-week year)

FY2025 gross margin 33.2% Guided gross margin level for fiscal 2025

FY2025 operating margin 12.6% (13.0% adjusted) GAAP and adjusted operating margin guidance for fiscal 2025

FY2025 EPS change -6% from $14.91 Guided decline in diluted EPS vs fiscal 2024

FY2026 sales growth 2.5% to 4.5% Preliminary total sales growth outlook for fiscal 2026

Market recovery sales 5% to 6% Total sales growth in market recovery case

Store & SRS footprint 2,356 stores; 1,200+ SRS locations Network size at end of Q3 referenced in update

Market Reality Check

$349.91 Last Close

Volume Volume 6,966,699 is 40% above the 20-day average of 4,971,000, indicating elevated trading ahead of the update. normal

Technical Shares at $349.91 are trading below the 200-day MA of $375.25, with the stock about 19.81% under its 52-week high.

Peers on Argus

HD was down 1.33% pre-update, while key peers were mostly negative: LOW -0.93%, FND -2.69%, AMZN -1.18%, TM -0.59%, with BABA +0.36%. This points more to stock- and subsector-specific pressure than a uniform sector spike.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 02	Strategic partnership	Positive	-0.9%	Instacart partnership in Canada for same-day delivery from over 175 stores.
Nov 25	Investor conference	Neutral	+4.3%	Announcement of 2025 Investor and Analyst Conference and footprint overview.
Nov 20	Dividend declaration	Positive	+3.3%	Declared $2.30 quarterly dividend, 155th consecutive cash dividend payment.
Nov 19	Product/AI launch	Positive	-0.6%	Launch of AI-powered Blueprint Takeoffs tool for professional customers.
Nov 18	Earnings & guidance	Negative	-6.0%	Q3 FY2025 results and guidance update highlighting housing pressure and EPS decline.

Pattern Detected

Recent news shows mixed reactions: dividend and earnings disclosure aligned positively/negatively with expectations, while some operational positives (Instacart partnership, AI tool) saw modest sell-offs, suggesting investors sometimes fade incremental strategic updates.

Recent Company History

Over the past months, Home Depot has combined strategic initiatives with capital returns. A Q3 FY2025 update on Nov 18 detailed $41.4B sales, modest comps and a guidance reset, which coincided with a -6.02% move. Subsequent AI and partnership launches generated only modest or negative price reactions, while the $2.30 quarterly dividend and the announcement of the Dec 9, 2025 Investor Conference were followed by solid gains. Today’s strategic update and reaffirmed guidance fit into this ongoing narrative of cautious growth amid housing pressure.

Market Pulse Summary

This announcement reaffirmed fiscal 2025 guidance, introduced a preliminary fiscal 2026 outlook, and framed a market recovery case, all within a roughly $1.1 trillion addressable market. Management guided to modest sales growth with pressured EPS, and highlighted operating and adjusted margin ranges. In context of recent earnings and strategic initiatives, investors may focus on how housing activity, larger project demand, and execution on Pro and omnichannel priorities track against the outlined sales and margin targets.

Key Terms

total addressable market financial

"position us well to grow share in an approximately $1.1 trillion total addressable market."

Total addressable market is the total potential sales opportunity for a product or service if it were to reach every possible customer. It helps investors understand the maximum size of the market and the growth potential for a business. Think of it as the entire pie available to be shared, indicating how big the opportunity could be.

gross margin financial

"Gross margin of approximately 33.2%"

Gross margin is the difference between how much money a company makes from selling its products and how much it costs to produce them, expressed as a percentage of sales. It shows how efficiently a company is turning sales into profit before other expenses like marketing or salaries. Higher gross margin means the company keeps more money from each sale, which is a good sign of financial health.

operating margin financial

"Operating margin of approximately 12.6%"

Operating margin shows how much profit a company makes from its core business activities after paying for costs like wages and materials. It’s useful because it tells you how efficiently a company is running—higher margins mean it keeps more money from each dollar of sales, which can indicate better management or stronger products.

adjusted operating margin financial

"Adjusted(1) operating margin of approximately 13.0%"

Adjusted operating margin shows how much profit a company makes from its core business activities, after removing unusual or one-time costs and income. It helps investors see the company's true profitability by providing a clearer picture, similar to removing unexpected expenses to understand the regular performance. This metric is useful for comparing companies or tracking performance over time, as it highlights consistent earning power.

non-gaap financial measures financial

"As used in this release, adjusted operating income, adjusted operating margin, and adjusted diluted earnings per share are non-GAAP financial measures."

Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.

AI-generated analysis. Not financial advice.

ATLANTA, Dec. 9, 2025 /PRNewswire/ -- The Home Depot^®, the world's largest home improvement retailer, will discuss key strategic priorities, provide a preliminary 2026 outlook and a market recovery case, today at its 2025 Investor and Analyst Conference. 

Today's conference will begin at 8:30 a.m. ET and will be available in its entirety through a live webcast and replay at ir.homedepot.com/events-and-presentations.

During today's conference, the company will discuss how it is uniquely positioned to grow market share and deliver shareholder value through its strategy to: drive core and culture, deliver a frictionless interconnected experience, and win the pro.

"We are focused on growing sales and delivering exceptional shareholder returns, supported by our culture and values," said Ted Decker, chair, president, and CEO. "The investments we've made over the last several years have further strengthened our distinct competitive advantages and position us well to grow share in an approximately $1.1 trillion total addressable market."

Fiscal Year 2025 Guidance

The company reaffirms its fiscal 2025 guidance, a 52-week year compared to fiscal 2024, a 53-week year:

• Total sales growth of approximately 3%
  • GMS expected to contribute approximately $2 billion in incremental sales
• Comparable sales growth to be slightly positive for the comparable 52-week period
• Approximately 12 new stores
• Gross margin of approximately 33.2%
• Operating margin of approximately 12.6%
• Adjusted⁽¹⁾ operating margin of approximately 13.0%
• Tax rate of approximately 24.5%
• Net interest expense of approximately $2.3 billion
• Diluted earnings-per-share to decline approximately 6% from $14.91 in fiscal 2024
• Adjusted⁽¹⁾ diluted earnings-per-share to decline approximately 5% from $15.24 in fiscal 2024
• Capital expenditures of approximately 2.5% of total sales

(1)   The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). As used in this release, adjusted operating income, adjusted operating margin, and adjusted diluted earnings per share are non-GAAP financial measures. Refer to the end of this release for an explanation of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures.

Preliminary Fiscal Year 2026 Outlook

Today, the company is providing a preliminary outlook for fiscal 2026:

• Home improvement market in a range between -1% to +1%
• Comparable sales growth of approximately flat to 2%
• Total sales growth of approximately 2.5% to 4.5%
• Operating margin of approximately 12.4% to 12.6%
• Adjusted⁽¹⁾ operating margin of approximately 12.8% to 13.0%
• Diluted earnings-per-share to increase approximately flat to 4%
• Adjusted⁽¹⁾ diluted earnings-per-share to increase approximately flat to 4%

Market Recovery Case

Today, the company is also providing a market recovery case:

• Total sales growth of approximately 5% to 6%
• Total comparable sales growth of approximately 4% to 5%
• Operating profit growth faster than sales
• Diluted earnings-per-share growth of approximately mid-to-high-single-digits

"Our Market Recovery Case reflects our performance expectations once we see momentum in housing activity and increased spend on larger projects driven by pent-up demand. We believe that the pressures in housing will correct and provide the home improvement market with support for growth faster than the general economy, and we expect to continue to grow faster than our market," said Richard McPhail, executive vice president and chief financial officer. "In our Accelerated Recovery Case, we could see sales and earnings per share grow faster in the event of a sharper housing recovery."

At the end of the third quarter, the company operated a total of 2,356 retail stores and over 1,200 SRS locations across all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. The Company employs over 470,000 associates. The Home Depot's stock is traded on the New York Stock Exchange (NYSE: HD) and is included in the Dow Jones industrial average and Standard & Poor's 500 index.

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this release constitute "forward-looking statements" under the federal securities laws, including as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events, and use words such as "may," "will," "could," "should," "would," "anticipate," "intend," "estimate," "project," "plan," "believe," "expect," "target," "prospects," "potential," "commit" and "forecast," or words of similar import or meaning or refer to future time periods. Forward-looking statements may relate to, among other things, the demand for our products and services, including as a result of macroeconomic conditions and changing customer preferences and expectations; net sales growth; comparable sales; the effects of competition; our brand and reputation; implementation of interconnected retail, store, supply chain, technology, innovation and other strategic initiatives, including with respect to real estate; inventory and in-stock positions; the state of the economy; the state of the housing and home improvement markets; the state of the credit markets, including mortgages, home equity loans, and consumer and trade credit; the impact of tariffs, trade policy changes or restrictions, or international trade disputes and efforts and ability to continue to diversify our supply chain; issues related to the payment methods we accept; demand for credit offerings including trade credit; management of relationships with our associates, jobseekers, suppliers and service providers; cost and availability of labor; costs of fuel and other energy sources; events that could disrupt our business, supply chain, technology infrastructure, or demand for our products and services, such as tariffs, trade policy changes or restrictions or international trade disputes, natural disasters, climate change, public health issues, cybersecurity events, labor disputes, geopolitical conflicts, military conflicts, or acts of war; our ability to maintain a safe and secure store environment; our ability to address expectations regarding sustainability and human capital management matters and meet related goals; continuation or suspension of share repurchases; net earnings performance; earnings per share; future dividends; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; changes in interest rates; changes in foreign currency exchange rates; commodity or other price inflation and deflation; our ability to issue debt on terms and at rates acceptable to us; the impact and expected outcome of investigations, inquiries, claims, and litigation, including compliance with related settlements; the challenges of operating in international markets; the adequacy of insurance coverage; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of legal and regulatory changes, including executive orders and other administrative or legislative actions, such as changes to tax laws and regulations; store openings and closures; guidance for fiscal 2025 and beyond; financial outlook; and the impact of acquired companies, including SRS Distribution Inc. and GMS Inc., on our organization and the ability to recognize the anticipated benefits of completed or pending acquisitions.   

These statements are not guarantees of future performance and are subject to future events, risks and uncertainties – many of which are beyond our control, dependent on the actions of third parties, or currently unknown to us – as well as potentially inaccurate assumptions that could cause actual results to differ materially from our historical experience and our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Part I, Item 1A. "Risk Factors," and elsewhere in our Annual Report on Form 10-K for our fiscal year ended February 2, 2025 and also as described from time to time in reports subsequently filed with the Securities and Exchange Commission. There also may be other factors that we cannot anticipate or that are not described herein, generally because we do not currently perceive them to be material. Such factors could cause results to differ materially from our expectations. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our filings with the Securities and Exchange Commission and in our other public statements.  

Non-GAAP Financial Measures

To provide additional transparency, we supplement our disclosure with certain non-GAAP financial measures. When used in conjunction with our GAAP financial measures, we believe these supplemental non-GAAP financial measures will help management and investors to better understand and analyze our performance. However, this supplemental information should not be considered in isolation or as a substitute for the related GAAP measures. Refer to the end of this release for an explanation and definitions of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures. 

NON-GAAP FINANCIAL MEASURES

Adjusted operating income, adjusted operating margin (calculated as adjusted operating income divided by total net sales), and adjusted diluted earnings per share are presented as supplemental financial measures in the evaluation of our business that are not required by or presented in accordance with GAAP. The Company excludes the impact of amortization expense from acquired intangible assets from adjusted operating income and adjusted operating margin, and the impact of amortization expense from acquired intangible assets, including the related tax effects, from adjusted diluted earnings per share. We do not adjust for the revenue that is generated in part from the use of our acquired intangible assets. Amortization expense, unlike the related revenue, is not affected by operations in any particular period unless an intangible asset becomes impaired, or the useful life of an intangible asset is revised. 

When used in conjunction with our GAAP results, we believe these non-GAAP measures provide investors with meaningful supplemental measures of our performance period to period, make it easier for investors to compare our underlying business performance to peers, and align to how management analyzes trends and evaluates performance internally. The Company provides non-GAAP financial information on this basis to facilitate comparability when we report earnings results. These non-GAAP measures should not be considered in isolation or as a substitute for their comparable GAAP financial measures. Investors should rely primarily on our GAAP results and use non-GAAP financial measures only supplementally in making investment decisions. Our calculation of non-GAAP measures may not be comparable to similarly titled measures reported by other companies and other companies may not define these non-GAAP financial measures in the same way, which may limit their usefulness as comparative measures. 

The most directly comparable GAAP measure to adjusted operating margin is operating margin, which is calculated as operating income divided by total net sales. Our adjusted operating margin guidance for fiscal 2025 and our preliminary outlook for fiscal 2026 excludes an expected approximately 40 basis point impact in each fiscal year, respectively, from acquired intangible asset amortization.  

The most directly comparable GAAP measure to adjusted diluted earnings per share is diluted earnings per share. Our adjusted diluted earnings per share guidance for fiscal 2025 and our preliminary outlook for fiscal 2026 excludes an expected after-tax impact of approximately $0.45 and $0.50, respectively, from acquired intangible asset amortization. 

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SOURCE The Home Depot

FAQ

What is Home Depot's fiscal 2025 sales and EPS guidance (NYSE: HD)?

Home Depot reaffirms FY2025 total sales growth of approximately 3% and expects diluted EPS to decline approximately 6% versus fiscal 2024.

What preliminary fiscal 2026 outlook did Home Depot (HD) provide on Dec. 9, 2025?

Preliminary FY2026: home improvement market -1% to +1%, comp sales flat to +2%, total sales +2.5%–4.5%, adjusted EPS flat to +4%.

How does Home Depot quantify the GMS impact for fiscal 2025 (HD)?

Home Depot expects GMS to contribute approximately $2 billion of incremental sales in FY2025.

What is Home Depot's Market Recovery Case and its projected EPS growth (NYSE: HD)?

The Market Recovery Case projects total sales +5%–6%, comp sales +4%–5%, and diluted EPS growth in the mid‑to‑high‑single‑digits.

What margins did Home Depot forecast for FY2026 in its preliminary outlook (HD)?

Home Depot provided FY2026 operating margin guidance of approximately 12.4%–12.6% and adjusted operating margin of 12.8%–13.0%.