Home Depot equity climbed more than 3% on Tuesday following the firm’s quarterly profit exceeding analyst projections despite a stagnant U.S. residential market, supported by steady demand from professional builders and minor renovations by cost-conscious homeowners.
At 12:42 p.m. EST, Home Depot shares were trading at $388.07, up by 2.94%, or $11.08.
The retailer, which reaffirmed its full-year outlook, has prioritized professional clients like contractors and carpenters. Their large-scale, persistent projects have enabled the company to balance the decline in major DIY initiatives caused by steep interest rates and a cooling national housing sector.
This past November, the company debuted an artificial intelligence utility tailored to assist these professionals in managing supply inventories and calculating project expenditure forecasts.
The home improvement giant has also reaped rewards from strategic price adjustments implemented last year to counteract trade levies, and leadership suggested on Tuesday that no additional hikes are anticipated before the spring peak season.
‘Frozen housing landscape’
Home Depot’s CFO Richard McPhail observed that American buyers and the firm have been navigating what he characterized as a “frozen housing landscape” since 2023, noting that market conditions have yet to demonstrate significant recovery.
“We’re still analyzing the impacts of the Supreme Court’s decision and new tariff announcements,” a company spokesperson told Reuters.
The organization posted a 0.4% uptick in comparable-store sales for the final quarter, outperforming Wall Street’s predictions of stagnant growth, according to LSEG figures cited by Reuters.
General financial volatility has made households more hesitant to commit to significant home upgrades, with a sluggish job market and affordability hurdles impacting consumer spending intentions.
Simultaneously, the broader real estate sector has provided minimal momentum. Sales of new American single-family residences dropped by 1.7% during the month of December.
The United States implemented a fresh 10% levy on all non-exempt imports starting Tuesday after President Donald Trump revealed a provisional worldwide 10% tariff on Friday, following a Supreme Court verdict against his previous mandates. Trump indicated on Saturday his intention to elevate that rate to 15%.
More than half of the retailer’s inventory is obtained within the U.S., and no individual foreign nation accounts for over 10% of total stock, according to executives, who added that tariff risk remained in the mid-single-digit range through 2025.
The company generated $2.72 in adjusted earnings per share for the fourth quarter, beating the consensus estimate of $2.54 among financial analysts.
The firm upheld its 2026 fiscal year guidance, predicting comparable sales growth between flat and 2% and forecasting adjusted earnings per share to range from flat to 4% above the prior year.
