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By Brian Nelson, CFA
Home Depot (HD) recently reported better than expected fourth quarter results with both the top and bottom lines exceeding the consensus forecast. Sales for the fourth quarter fell 3.8% from the fourth quarter of last year due to one less week of selling compared to last year, while comparable sales increased 0.4% and comparable sales in the U.S. increased 0.3%. Comparable customer transactions fell 1.6%, while comparable average ticket increased 2.4%. Net earnings for the fourth quarter came in at $2.6 billion, compared with net earnings of $3.0 billion, again impacted by the one less selling week in the fourth quarter of 2025. Adjusted diluted earnings per share were $2.72 in the fourth quarter, compared to $2.83 in the same period of fiscal 2024.
Management had the following to say about the results:
Throughout fiscal 2025, our teams did an incredible job engaging with our customers and growing market share, and I would like to thank them for their hard work and dedication. For the fourth quarter, our results were largely in-line with our expectations, reflecting the lack of storm activity in the third quarter and ongoing consumer uncertainty and pressure in housing. Adjusting for storms, underlying demand was relatively stable throughout the year.
Home Depot raised its quarterly dividend 1.3%, to $2.33, and issued decent guidance for fiscal 2026. For the year, management expects total sales growth of approximately 2.5%-4.5%, with comparable sales growth approximately flat to up 2%. It plans to build approximately 15 new stores and generate an operating margin of approximately 12.4%-12.6% on the year. Adjusted operating margin is targeted at roughly 12.8%-13.0%. Adjusted diluted earnings per share is anticipated to grow flat to up 4% from $14.69 in fiscal 2025. At the end of the year, cash and cash equivalents were $1.4 billion compared to $50.8 billion in short- and long-term debt. Shares yield 2.5% at the time of this writing.
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Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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