Core Viewpoint - Home Depot reported quarterly earnings of $3.74 per share, missing the Zacks Consensus Estimate of $3.81 per share, representing an earnings surprise of -1.84% [1] - The company posted revenues of $41.35 billion for the quarter, surpassing the Zacks Consensus Estimate by 0.88% and showing a year-over-year increase from $40.22 billion [2] Financial Performance - Home Depot's earnings of $3.74 per share compare to $3.78 per share a year ago, indicating a slight decline [1] - The company has surpassed consensus revenue estimates three times over the last four quarters, while it has only exceeded EPS estimates once in the same period [2] Stock Performance - Home Depot shares have declined approximately 8% since the beginning of the year, contrasting with the S&P 500's gain of 13.4% [3] - The current Zacks Rank for Home Depot is 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.89 on revenues of $37.99 billion, and for the current fiscal year, it is $14.96 on revenues of $164.12 billion [7] - The estimate revisions trend for Home Depot was mixed ahead of the earnings release, indicating potential changes in expectations following the report [6] Industry Context - The Retail - Home Furnishings industry, to which Home Depot belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, highlighting the importance of tracking these revisions [5]

Core Insights - Home Depot's stock experienced a decline following an earnings miss and a pessimistic outlook, primarily due to a lack of storms and ongoing weakness in the housing market impacting demand [1] Financial Performance - The company's earnings report indicated a shortfall compared to expectations, contributing to the stock drop [1] - The overall performance was negatively influenced by external factors such as weather conditions and market trends in housing [1] Market Conditions - The housing market continues to show signs of weakness, which has adversely affected consumer demand for Home Depot's products [1] - The absence of storms, which typically drive sales in home improvement sectors, further exacerbated the situation [1]

Core Insights - Home Depot reported a decline in third-quarter profit and has revised its full-year outlook downward due to a prolonged downturn in home improvement activity [1] Company Summary - The company is experiencing a significant decrease in profitability, indicating challenges in the home improvement sector [1] - Home Depot's lowered full-year outlook suggests that the current market conditions are expected to persist, impacting future performance [1] Industry Summary - The home improvement industry is facing an extended downturn, with little indication of recovery in the near term [1]

Financial Performance - The Home Depot reported third quarter fiscal 2025 sales of $41.4 billion, an increase of $1.1 billion or 2.8% from the same period in fiscal 2024[1]. - Net earnings for the third quarter were $3.6 billion, or $3.62 per diluted share, compared to $3.6 billion, or $3.67 per diluted share in the same period of fiscal 2024[1][2]. - Adjusted diluted earnings per share for the third quarter were $3.74, down from $3.78 in the same period of fiscal 2024[2]. - Operating margin for the third quarter was approximately 12.6%, with an adjusted operating margin of approximately 13.0%[6]. - The diluted earnings per share are expected to decline approximately 6.0% from $14.91 in fiscal 2024[6]. - Net earnings for the nine months ended November 2, 2025, were $11,585 million, slightly down from $11,809 million in the same period of 2024, a decrease of 1.9%[16]. - The company reported a diluted earnings per share (GAAP) of $3.62 for the three months ended November 2, 2025, down 1.4% from $3.67 in the same period of 2024[24]. Sales and Growth Projections - The company updated its fiscal 2025 guidance to reflect total sales growth of approximately 3.0%, with GMS expected to contribute approximately $2.0 billion in incremental sales[3]. - Comparable sales growth is projected to be slightly positive for the comparable 52-week period[3]. - Customer transactions decreased by 1.4% to 393.5 million in the third quarter compared to 399.0 million in the same period of fiscal 2024[12]. Store Operations - The company plans to open approximately 12 new stores in fiscal 2025[3]. - The company operated a total of 2,356 retail stores and over 1,200 SRS locations at the end of the third quarter[5]. Assets and Liabilities - Total assets increased to $106,274 million in November 2025, up from $97,264 million in October 2024, representing a growth of 9.3%[14]. - Total current liabilities rose to $34,367 million in November 2025, compared to $29,092 million in October 2024, marking an increase of 18.4%[14]. Cash Flow and Investments - Cash and cash equivalents at the end of the period were $1,684 million, an increase from $1,531 million at the end of October 2024[16]. - Capital expenditures for the nine months ended November 2, 2025, were $2,621 million, compared to $2,384 million in the same period of 2024, reflecting an increase of 9.9%[16]. - The net cash used in investing activities for the nine months ended November 2, 2025, was $7,765 million, significantly lower than $19,912 million in the same period of 2024[16]. Stockholders' Equity - The company reported a total stockholders' equity of $12,116 million in November 2025, a substantial increase from $5,786 million in October 2024[14].

Core Insights - Home Depot exceeded third-quarter sales expectations due to strong demand from professional builders and contractors, which compensated for a decline in do-it-yourself projects [1] Company Performance - The company reported robust sales driven by professional segments, indicating a shift in consumer behavior towards professional services [1] Market Trends - There is a noticeable slowdown in do-it-yourself projects, suggesting a potential shift in market dynamics and consumer preferences [1]

Core Viewpoint - Home Depot is set to release its third-quarter earnings results, with analysts expecting an increase in earnings per share and revenue compared to the previous year [1][2]. Earnings Expectations - Analysts anticipate Home Depot will report earnings of $3.83 per share, up from $3.67 per share in the same quarter last year [1]. - The consensus estimate for quarterly revenue is $41.12 billion, compared to $40.22 billion a year earlier [1]. Recent Performance - Home Depot has exceeded revenue analyst estimates in six of the last ten quarters but missed estimates in the most recent second quarter [2]. - The company's shares fell by 1.2%, closing at $358.03 on Monday [2]. Analyst Ratings and Price Targets - Telsey Advisory Group maintains an Outperform rating with a price target of $455 [4]. - Wells Fargo has an Overweight rating, reducing the price target from $450 to $435 [4]. - JP Morgan holds an Overweight rating, lowering the price target from $452 to $444 [4]. - Truist Securities maintains a Buy rating, cutting the price target from $454 to $421 [4]. - Morgan Stanley has an Overweight rating, increasing the price target from $415 to $430 [4].

Core Insights - Big-box estimates have slightly decreased due to a decline in foot traffic, raising concerns among analysts about consumers potentially losing their shopping appetite [1] Group 1 - Analysts are worried about the declining foot traffic in big-box stores, which may indicate a shift in consumer behavior [1] - The overall estimates for big-box retailers have been adjusted downward as a result of these trends [1]

Core Viewpoint - The outlook for the retail sector heading into the holiday season is bleak, primarily due to rising inflation impacting consumer health, especially among low-income consumers [1][3]. Retail Earnings Outlook - Major retailers such as Walmart, Home Depot, and Target are set to report earnings, with cautious sentiment prevailing in the market [1][4]. - Five Below is identified as the most likely retailer to exceed consensus expectations in its upcoming earnings report, benefiting from macro tailwinds and company-specific improvements [5]. - Target is expected to miss expectations due to ongoing struggles with consumer perception, being viewed as a "nice to have" rather than a necessity [6]. - Walmart is anticipated to report inline results, but the current stock valuation suggests limited upside potential [6][7]. Home Improvement Sector - Home Depot and Lowe's are experiencing muted performance, with expectations for uninspiring results in their upcoming reports [9]. - The performance of these companies is largely driven by macroeconomic factors, particularly interest rates and housing turnover, which will influence home improvement demand [9]. Costco's Position - Costco's earnings report is scheduled for the second week of December, with expectations for better performance due to its focus on middle to high-income consumers, who are faring better than low-income consumers [10].

Home Depot and Lowe's are set to post modest sales gains when they report quarterly results this week, giving investors a read on whether the outlook is improving or consumer caution is still holding ... ...

We're back on Morning Trade Live. We'll get a closer look at the home improvement trade tomorrow morning when Home Depot reports its earnings. And it's been a rough go for those stocks this year.Home Depot and Lowe's both down more than 5% in 2025, while Floor and Decor and Builder First Source are both down more than 25% year to date. So, let's go inside out on Home Depot ahead of tomorrow's earnings. Joining us now is Sky Canaves, who's the principal analyst at Earketer.Thanks so much, Sky, for joining us ...