Home Depot’s fiscal fourth quarter results paint a familiar picture: the American homeowner remains cautious, selective, and increasingly uncertain about the macro backdrop.
The retailer posted $38.2 billion in revenue for the quarter ended February 1, a 3.8% decline year-over-year — though roughly $2.5 billion of that gap is explained by a missing 14th week in the current fiscal calendar. Strip that out via comparable sales, and you get a modest 0.4% increase. Earlier today, the CaseShiller 20-city US house price index was up just 1.4% with the South particularly soft.
CFO Richard McPhail described a “frozen housing environment” that’s now persisted for three years with no meaningful thaw. He highlighted housing affordability and job security as worries for consumers. In terms of metrics, store transactions fell 1.6% year-over-year, even as average ticket rose 2.4%, suggesting fewer trips but slightly larger baskets when shoppers do show up, largely due to inflation.
Big-ticket transactions — those over $1,000 — edged up 1.3%, but McPhail conceded that some of that reflects “modest” price increases rather than genuine demand strength.
The good news is mortgage rates have come down to 5.99% on the 30-year fixed, matching the lowest level since 2022 but only marginally. In terms of guidance, McPhail said that 2026 looks like it will be no better than last year.
The lock-in effect remains a critical barrier. If you bought or refinanced at 3%, you’re not moving to take on a 6% mortgage unless you absolutely have to. And if you’re a first-time buyer, affordability ratios remain stretched to levels that simply don’t pencil for most households. The result is that housing turnover stays depressed.
Regarding tariffs, the company says it’s “still in the middle of analysis” on the latest proposed 15% global tariff, and that more than half of what it sells is domestically sourced. It’s also diversifying imports so no single foreign country represents more than 10% of purchases.
That’s prudent supply chain management, but it doesn’t eliminate the risk of further price increases being passed through to an already
Home Depot’s fiscal 2026 outlook calls for total sales growth of 2.5% to 4.5%, comparable sales ranging from flat to up 2%, and adjusted EPS roughly flat to up 4%. That’s not a company signaling a recovery.
The stock popped 3.4% on the earnings beat, and some bulls are pointing to spring selling season and moderating mortgage rates as potential catalysts. Maybe. But until housing turnover meaningfully picks up — and that requires both rates and prices to cooperate — Home Depot’s consumer-facing business remains in holding pattern territory.
