Executive Snapshot
On February 24, 2026, shares finished at $384.48, up by 1.99% (1D), 13.9% (3M), and 11.23% (YTD).
Home Depot comparable sales increased by +0.4%, and Home Depot Q4 FY25 sales reached $38.20 billion, indicating a marginally positive same-store underlying demand.
Adjusted EPS was $2.72, which was 7.80% higher than the $2.52–$2.54 expectation range.
FY26 projection indicates a solid, rather than booming, demand environment, with sales growth of approximately 2.5% to 4.5% and comps of approximately flat to +2.0%.
The quarterly dividend rose 1.3% to $2.33 per share (annualized at $9.32 per share).
What’s moving the stock now
The "real" demand signal (comps), not just headline sales, is what the market is concentrating on following the recent HD earnings.
Although the previous year's quarter included an extra week, Q4 sales were down -3.8% YoY. About $2.5 billion more was made over that extra week than during the same period last year. The main takeaway from shifting your perspective to a like-for-like comparison is a modest but favorable comparative sales result of +0.4%.
The delivery of profits exceeded expectations.
With an adjusted EPS of $2.72, it was well above the estimated range of $2.52 to $2.54. Because it indicates cost management, mix, and execution, a clean EPS beat frequently counts more to an established store than a modest sales beat.
Dividend action supports the “shareholder return” narrative.
Particularly when investors are closely watching consumer demand and housing conditions, the quarterly dividend hike to $2.33 per share helps bolster confidence in the company's cash-generating potential.
The forward tone remains cautious due to housing conditions.
The FY26 prognosis predicts modest growth. This aligns with the fact that large-scale housing projects may stall when home turnover is low, and buyers are wary, making guidance a crucial sentiment anchor.
Expectations Gap
Q4 FY25 actual vs estimate:
- Total sales: $38.20B vs ~$38.14B → 0.16% surprise.
- This is a small revenue beat—helpful, but not the main driver.
- Adjusted EPS: $2.72 vs ~$2.52–$2.54 → 7.80% surprise.
- That’s a larger beat (+$0.18 to +$0.20) and signals stronger profitability than expected.
Adjusted EPS increased by roughly $0.30 due to the extra week in the previous year's quarter, making year-over-year comparisons appear more difficult than the underlying operating trend.
Operating read-through
Traffic was softer, but comps were good.
Comparable customer transactions decreased by 1.6%, while comparable sales increased by 0.4%. Customers typically spend more each time they shop, offsetting the reduction in shopping trips.
The hard work was done by ticket growth.
The average price of a comparable ticket went up by 2.4%, from $89.11 to $91.28. Even when transaction numbers are under pressure, this helps sales.
The number of headline transactions dropped precipitously, in part because of the calendar.
366.5 million consumer transactions were made overall, a decrease of 400.4 million (-8.5%). This headline drop may exaggerate the underlying slowdown because the previous quarter had an extra week; therefore, the comp-transaction statistic is the clearer indicator.
Despite a decline from the previous year, cash generation is nevertheless robust.
Net cash from operations for FY2025 was $16.325 billion, up from $19.810 billion in FY2021 alone. The company continued to fund $3.679 billion in capital expenditures and $9.152 billion in dividends, demonstrating its ability to invest while returning capital to shareholders.
Valuation + positioning
Price position within the 52-week range:
- Current: $384.48
- 52-week high: $426.75 (Sep 17, 2025)
- 52-week low: $326.31 (Apr 9, 2025)
The stock has been rising (+13.9% over the last three months) and is currently above the low and below the high.
Volume indicates that the update is receiving more attention.
Latest volume: 5,675,810 vs 20D average ~4,362,557
Investors are frequently actively repositioning around earnings, the outlook, and dividend choices when volume is above average.
Multiples
- P/E (TTM): 25.7x–27.0x
- P/E (Forward): 24.5x–26.3x
- EV/EBITDA: 17.1x–18.8x
The stock frequently trades on confidence in comps, margins, and cash returns because these valuation levels are usually consistent with a large, consistent cash-generating store.
Balance sheet framing
- Market cap: $382.75B | EV: $439.03B
- Net debt: $56.28B
- Total debt: ~$57.88B | Cash: ~$1.6B
Additionally, management anticipates net interest expense of about $2.3 billion in FY26, underscoring the relevance of financing costs while rates remain a priority.
Catalysts
- Read-through of early FY26 demand: whether comps move within the range of ~flat to +2.0%.
- Performance during the spring: a crucial time for demand and project activity related to home remodeling.
- Margin delivery: aiming for a gross margin of about 33.1% and an operating margin of about 12.4% to 12.6%.
- Capital returns: ongoing focus on total shareholder return stance and dividend sustainability.
Risks
- Housing sensitivity: a stagnant housing environment might lower demand for large-scale projects and postpone remodeling cycles.
- Traffic pressure: comp transactions decreased by 1.6% in Q4; if ticket growth slows, sales momentum may rapidly wane.
- Exposure to financing costs: net debt of $56.28 billion and net interest expenditure of about $2.3 billion (FY26 projection) make interest rates and funding costs crucial.
- Margin execution: EPS may be impacted by any deviation from the guidance, which implies discipline in pricing, labor, and the supply chain.
Shariah compliance
For investors looking at Shariah-compliant stocks, HD (The Home Depot) screening result is Pass. Most business operations are allowed: 99.94% Halal, 0.00% Doubtful, and 0.06% Not Halal. While interest-bearing debt accounts for 45.97% of total exposure, interest-based exposure to interest-bearing securities and assets is 0.48%. Interest income and other factors account for the small portion that is not halal.
Bottom line
With marginally positive comps, better-than-expected profitability (adjusted EPS beat), and a dividend rise, the quarter shows Home Depot is still in a "steady execution" position. The short-term scenario suggests that investors will continue to monitor traffic patterns, margin delivery, and demand behavior in a cautious housing environment, as the FY26 prognosis indicates modest growth rather than a dramatic rebound.
Sources
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Nusrat Ahmed
Hojiakbar Obobakir