Home Depot CEO issues stern warning as consumers shift gears

Home Depot, 1 of the largest U.S. location betterment retailers, continues to look challenges arsenic shoppers displacement their discretionary spending habits successful stores. In response, the retailer’s CEO has issued a stern informing astir however shifting user sentiment and marketplace pressures could interaction the company’s aboriginal show and sales.

In the 4th fourth of 2025, Home Depot’s U.S. comparable income accrued by a insignificant 0.3% twelvemonth implicit year, according to the company’s latest net report.

Also, caller Placer.ai information revealed that Home Depot’s same-store visits were down by 1.5% twelvemonth implicit twelvemonth successful October, up 3% successful November and down 0.5% successful December.

Amid weaker user demand, the retailer’s operating income dropped by 14.4%.

Home Depot’s mediocre show comes aft it faced respective user boycotts past twelvemonth implicit its determination to chopped its diversity, equity, and inclusion policies and its alleged practice with ICE’s migration crackdown (an accusation Home Depot antecedently denied). It besides precocious raised prices successful its stores to offset tariff pressures.

Additionally, Home Depot continues to endure from uncertainty successful the U.S. lodging market.

“The location betterment abstraction has faced sustained unit from macroeconomic headwinds — including persistent ostentation and a cooling lodging marketplace — prompting galore consumers to hold large projects and defer big-ticket purchases,” wrote Ezra Carmel, contented writer astatine Placer.ai, successful an analysis.

Home Depot Chief Financial Officer Richard McPhail confirmed during an net telephone connected Feb. 24 that existent housing-market challenges are affecting however location betterment consumers store successful stores.

Related: Home Depot cuts backmost cardinal worker payment amid lawsuit struggles

“There are a fig of dynamics we are observing that are pressuring lodging and location betterment demand,” said McPhail. “The existent owe complaint situation and important summation successful location prices since 2019 person impacted lodging affordability. Housing turnover has remained astatine humanities lows since 2023, which has importantly reduced request for projects and different purchases associated with buying and selling a home.”

Billy Bastek, Home Depot enforcement vice president of merchandising, said that portion the institution saw categories specified arsenic power, plumbing, and electrical execute good during the 4th quarter, “larger discretionary projects stay nether pressure.”

It is nary astonishment that less consumers are tackling these projects. The mean 30-year owe complaint successful the U.S. has been elevated since 2022, sitting supra 6%.

In caller months, owe rates person dilatory declined, but challenges remain. In January, the U.S. lodging marketplace saw a dip successful existing-home sales, according to caller information from the National Association of Realtors.

• In January, the mean 30-year fixed-rate mortgage was 6.10%, down from 6.19% successful December.

• The median existing-home income terms reached $396,800, up 0.9% twelvemonth implicit year.

• Existing-home sales dropped by 8.4% month implicit period and 4.4% year implicit year.

• Specifically, month-over-month U.S. location income decreased by 5.9% successful the Northeast, 7.1% successful the Midwest, 9% successful the South, and 10.3% successful the West.
  Sources: National Association of Realtors, Freddie Mac

NAR main economist Lawrence Yun said successful a property merchandise that the “decrease successful income is disappointing.” However, helium added that though lodging affordability is improving, proviso remains an issue.

“Affordability conditions are improving, with NAR’s Housing Affordability Index showing that lodging is the astir affordable it’s been since March 2022,” said Yun.

“This is owed to wage gains outpacing location terms maturation and owe rates being little than a twelvemonth ago,” helium added. “However, proviso has not kept gait and remains rather low. Due to debased supply, the median location terms reached a caller precocious for the period of January.”

Home Depot CEO Ted Decker said during the net telephone that the institution expects economical pressures to proceed passim the year.

“Our customers besides archer america they person concerns implicit wide economical uncertainty, including inflation, increasing occupation concerns, and higher financing costs,” said Decker. “As we look up to fiscal 2026, we expect these pressures volition persist, arsenic we person not yet seen a catalyst for an inflection successful lodging activity.”

For fiscal twelvemonth 2026, Home Depot expects its comparable income to either stay level oregon turn by 2%.

Decker emphasized that the apical crushed the company’s income could autumn astatine the little extremity of that scope is continued user uncertainty resulting from mediocre marketplace performance.

He said Home Depot has yet to spot a large betterment successful ample discretionary purchases, a motion the marketplace is inactive struggling.

“That’s truly the telltale for america of erstwhile we deliberation the request illustration is going to alteration for the upside, and we inactive person not seen that,” helium said. “You’ve heard america consistently present saying things are improving. Our comp (comparable sales) intelligibly improved, a affirmative comp successful 2025, but we person not seen the summation successful large ticket, and that volition beryllium a telltale for a crook successful the market.”

Decker highlighted that debased lodging turnover has led to a $22 cardinal cumulative underspend by consumers connected location betterment projects, a inclination helium said the institution doesn’t expect to worsen.

“Turnover evidently helps radical hole things up earlier they sell, and the caller proprietor modifies the location to however they privation it,” said Decker. “It besides has an interaction connected the radical who deliberation they’re gonna determination and conscionable waiting successful much of a repair than a replacement cycle. I don’t needfully deliberation that’s gonna get immoderate worse, but we’re surely bouncing on what we anticipation would beryllium a bottommost successful things similar turnover.”

Despite caller challenges, Home Depot plans to unfastened 15 caller stores this twelvemonth and is betting large connected its caller motorboat of integer tools powered by artificial quality to thrust user demand.

In September past year, Home Depot launched a Project Planning instrumentality for its Pro customers (residential and commercialized nonrecreational contractors), which allows them to make worldly lists, way and negociate orders, personalize transportation preferences, and summation visibility connected aboriginal pricing and inventory availability.

“We’ve improved in-store tools and processes that thrust greater engagement with our Pros that person resulted successful higher income there,” said Bastek.

More Retail:

• Lowe’s rolls retired escaped offers for customers amid challenges

• Home Depot and Lowe’s softly summation caller rival

• Kroger adds generous connection for customers arsenic market prices rise

Last month, Home Depot besides expanded its concern with Google Cloud to motorboat much AI tools to assistance associates and customers with task completion tasks.

Decker said during the telephone that Pros customers volition soon person much AI tools to marque tackling projects much seamless.

“We’re introducing a fig of task absorption and database builders for our pros, including things similar an AI takeoff scheme, letting pros physique projects, conscionable typing successful the benignant of task they’re moving connected successful a pre-populated database of the task successful the app for the pros, truthful they don’t person to spell done and enactment the hundreds of items,” said Decker.

“It pre-populates, and past they tin edit that list, they tin prevention that, repetition it for aboriginal jobs. There’s a tremendous acceptable of activities,” helium continued.

Related: Home Depot implicit the years: A implicit past of America's biggest hardware store

This communicative was primitively published by TheStreet connected Feb 26, 2026, wherever it archetypal appeared successful the Retail section. Add TheStreet arsenic a Preferred Source by clicking here.