Home Depot(US:HD) Xin Lang Cai Jing·2025-12-09 13:07Core Viewpoint - Home Depot has issued a cautious preliminary earnings guidance for the upcoming year, indicating that the company does not expect a rebound in the real estate market in the short term [1][4]. Group 1: Earnings Guidance - The company anticipates same-store sales growth to be flat to a 2% increase, which is below market expectations compiled by Bloomberg [1][4]. - Home Depot's total sales growth forecast is also lower than market estimates [1][4]. - In a scenario of "market recovery," where housing market activity and related spending increase, same-store sales are expected to grow by 4% to 5% [1][4]. Group 2: Market Conditions - The performance of Home Depot is under pressure due to the U.S. real estate market, with high interest rates causing consumers to be cautious about large purchases and financing renovation projects [1][4]. - Although mortgage rates have decreased compared to a year ago, high overall economic costs continue to make consumers act cautiously, and housing prices remain elevated, making it difficult for many to afford homes [1][4]. Group 3: Stock Performance - Following the announcement of the lack of expected demand rebound, Home Depot's stock price has dropped 10% year-to-date, while the S&P 500 index has risen by 16% during the same period [2][5]. - In pre-market trading on Tuesday, Home Depot's stock fell by an additional 0.8% [2][5]. Group 4: Strategic Initiatives - In response to the ongoing slowdown in performance, Home Depot has increased its focus on online business and expanded its offerings to professional contractors, who typically have higher spending than DIY consumers [2][5]. - The company has maintained its earnings guidance for the fiscal year 2025 [3][5].