Home Depot stock falls after company cuts full-year outlook as consumers put off home improvement projects

Home Depot (HD) stock fell 4% early Tuesday after the home improvement retailer reported third quarter results that missed forecasts and lowered its full-year outlook as the US housing market remains sluggish.

The company expects same-store sales for the full year to be “slightly positive” where it had previously expected a 1% increase for 2025.

Full year profits are also now expected to fall more sharply, with adjusted earnings per share forecast to fall 5%, more than the 2% drop the company expected as of August.

In the third quarter, the company’s adjusted EPS came in at $3.74, missing forecasts for earnings per share of $3.84, according to Bloomberg data. Revenue tallied $41.4 billion, ahead of forecasts for $41 billion.

Same-store sales rose 0.2% overall and 0.1% in the US. The Street expected same-store sales to rise closer to 1.3% in the third quarter.

In the company’s release, CEO Ted Decker said its third quarter results came in below forecasts, “primarily due to the lack of storms in the third quarter, which resulted in greater than expected pressure in certain categories.”

Telsey Advisory Group’s Joe Feldman wrote in a note to clients early Tuesday that, “The result and guidance reduction are disappointing, given commentary last quarter that home improvement demand for small repair and maintenance projects was picking up.”

Feldman still thinks, “the company stands to benefit as housing demand recovers.”

Home Depot’s results come as mortgage rates remain stubbornly high, pushing more Americans to stay in their current living situations, while a softening labor market has also pressured demand for the large-scale renovation projects crucial to the company’s results.

“While underlying demand in the business remained relatively stable sequentially, an expected increase in demand in the third quarter did not materialize,” Decker said in the release.

“We believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand.”

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

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