Home Depot tops expectations in the fourth quarter, but customers pull back on spending

Core Insights - Home Depot's fiscal fourth-quarter performance was impacted by an extra week in the previous year and cautious consumer behavior amid a weak housing market, yet adjusted earnings and revenue exceeded Wall Street expectations [1][2] Financial Performance - The company reported earnings of $2.57 billion, or $2.58 per share, for the quarter ending February 1, down from $3 billion, or $3.02 per share, a year earlier [1] - Adjusted earnings were $2.72 per share, surpassing the $2.53 per share forecast by analysts [2] - Revenue for the quarter was $38.2 billion, a decrease from $39.7 billion the previous year, with the extra week in the prior year contributing approximately $2.5 billion in sales [2] Sales Metrics - Comparable store sales increased by 0.4%, with U.S. comparable store sales rising by 0.3% [3] - Customer transactions fell by 1.6%, while the average amount spent per transaction rose to $91.28 from $89.11 a year earlier [3] Consumer Sentiment and Market Conditions - U.S. consumer confidence dropped significantly in January, reaching its lowest level since 2014, as concerns about financial prospects grew [4] - Sales of previously occupied U.S. homes decreased by 8.4% in January, marking the largest monthly decline in nearly four years, attributed to high home prices and adverse winter weather [5] Future Outlook - For fiscal 2026, Home Depot expects adjusted earnings to be flat to up 4% from fiscal 2025's $14.69 per share, with total sales growth projected at 2.5% to 4.5% and comparable sales growth anticipated to be flat to up 2% [8]