ZACKS·2026-02-23 16:05Core Viewpoint - The upcoming earnings report for Home Depot is anticipated to reflect a challenging yet resilient performance amid ongoing pressures in the housing market [1] Group 1: Home Depot's Earnings Expectations - Home Depot is projected to report earnings per share of $2.52, representing a 19.5% decline year-over-year, with revenue expected at $38.25 billion, down approximately 3.7% from the prior-year quarter [2] - The company has reaffirmed its guidance for the fiscal year, expecting around 3% total sales growth and slightly positive comparable sales for the 52-week period [3] Group 2: Sales and Market Dynamics - Comparable sales are a key focus, with Home Depot's Pro segment providing a buffer against DIY softness, supported by expanded supply chain initiatives and digital tools [4] - For the upcoming year, comparable sales growth is forecasted to be flat to +2%, with a market recovery scenario envisioning growth of +4% to +5% if housing activity rebounds [5] Group 3: Interest Rate Impact - The interest rate outlook is crucial, with 30-year fixed mortgages expected to decline from the low-6% range to the mid-5% range by year-end, potentially stimulating housing turnover and remodel activity [6] Group 4: Earnings Surprise Potential - Home Depot holds a Zacks Rank 3 (Hold) with a positive Earnings ESP of +5.61%, indicating potential for an upside surprise in its upcoming earnings report [8] - The company’s performance may affirm sector stability if comparable sales and guidance align with recovery scenarios [9] Group 5: Competitive Landscape and Trends - Home Depot's acquisition of GMS enhances its Pro offerings, while risks such as tariffs on materials may persist, though scale and inventory management are expected to mitigate these challenges [9] - Lowe's is also set to report earnings, with expectations of EPS at $1.95, reflecting a 1.04% year-over-year increase, and revenue of $20.36 billion, up 9.76% from the prior-year quarter [10]