Home Depot Tops Q4 Earnings Estimates, Stock Dips on Sales Miss

Core Insights - Home Depot Inc. reported fourth-quarter fiscal 2025 results with earnings per share (EPS) exceeding estimates, while net sales fell short of expectations and declined year over year [1][4][5] Financial Performance - Adjusted EPS for the fourth quarter was $2.72, down 13.1% from $3.13 in the same quarter last year, but above the Zacks Consensus Estimate of $2.52 [4] - Net sales decreased by 3.8% to $38.2 billion from $39.7 billion year over year, missing the Zacks Consensus Estimate of $38.3 billion [5] - Comparable sales increased by 0.4%, with U.S. comps rising by 0.3% [5][8] - Gross profit fell by 4.4% year over year to $12.5 billion, with a gross margin of 32.6%, down 20 basis points [9] - Operating income was $4.02 billion, down 13.4% year over year, with an operating margin of 10.5%, contracting 120 basis points [10] Market Reaction - Shares of Home Depot declined by 1.4% in pre-market trading due to the disappointing results and a cautious outlook on earnings and margins [3] Future Outlook - For fiscal 2026, Home Depot anticipates sales growth of 2.5-4.5% and flat to 2% growth in comparable sales [13] - The company expects a gross margin of 33.1% and an operating margin between 12.4-12.6% [13] - Projected adjusted EPS growth for fiscal 2026 is between flat and 4% year over year [14] Dividend Information - The board approved a 1.3% increase in the quarterly dividend to $2.33 per share, marking the 156th consecutive quarter of cash dividend payments [12]