Home Depot CEO sounds alarm on troubling customer trend in stores

Core Insights - Home Depot is facing challenges in increasing sales due to declining consumer demand and foot traffic, with CEO Ted Decker highlighting the impact of external factors such as weather and economic conditions [1][4][11] Sales Performance - In Q3 2025, Home Depot's U.S. comparable sales rose by only 0.1% year-over-year, falling short of expectations, while foot traffic at same-store locations decreased by 0.1% [2][3] - The company reported an operating income of $5.3 billion, which is a 1.2% decline compared to Q3 2024 [3] External Factors Impacting Sales - CEO Ted Decker attributed weak sales to the lack of storms, which previously boosted sales in categories like plywood and roofing [4][5] - The absence of significant storm activity in 2025 is expected to lead to lower sales for the remainder of the year compared to 2024 [5][6] Housing Market Challenges - The housing market is experiencing significant pressure, with turnover at a 40-year low of 2.9%, and a cumulative underspend of $50 billion in normal repair and remodel activities [7] - High mortgage rates, averaging above 6% since 2022, are causing consumers to delay home purchases, further impacting demand for home improvement products [8] Consumer Sentiment and Spending - Concerns about high living costs and job market instability are affecting consumer spending, leading to reduced demand in Home Depot stores [11][12] - Approximately 87% of consumers are worried about the financial impact of tariffs, with many planning to change their shopping habits in response [19] Strategic Initiatives - To attract customers, Home Depot has expanded its offerings for Pro customers through significant acquisitions, including GMS for $5.5 billion and SRS Distribution for $18.25 billion [15][16] - The company aims to grow total sales by about 3% for fiscal year 2025, while adjusted diluted earnings per share are expected to decline by roughly 5% compared to fiscal year 2024 [17]