Home Depot reports Q4 beat, despite declining sales

Today’s headlines

What’s happening: Shares of Home Depot climbed on Tuesday after the company released its fourth-quarter results.

What happened: Although the retailer posted a decline in sales, the figure came in better than expected, despite a sluggish housing market in the US.

Home Depot increased its quarterly dividend by 1.3% and reiterated its 2026 guidance.

How were the results: The Atlanta, Georgia-based company reported a single-digit decline in sales for the latest quarter.

• Sales fell 3.8% year-over-year to $38.198 billion, but topped consensus estimates of $38.119 billion.
• Adjusted diluted earnings came in at $2.72 per share, beating Wall Street expectations of $2.54 per share.

Why it matters: Higher interest rates, sluggishness in the US housing market and economic uncertainty have led to customers delaying home improvements, exerting pressure on the company’s growth. New single-family home sales in the US fell 1.7% in December.

Home Depot said its net income declined to $2.57 billion, or $2.58 per share, in the three-month period ended February 1, from $3.0 billion, or $3.02 per share, in the year-earlier quarter. The company also reported lower quarterly revenue, while attributing a part of the decline to fiscal 2025 having one less week.

Despite these factors, the company managed to top earnings estimates in the latest quarter after missing expectations for three straight quarters. Its comparable sales rose 0.4%, with US comp sales rising 0.3%.

Home Depot also benefited from price increases announced last year to offset the impact of tariffs. The company indicated no plans of further price hikes before the spring season.

Store transactions across the company’s website and stores fell by 1.6% year-over-year in the fourth quarter, while the average ticket surged 2.4%.

Home Depot increased its quarterly dividend by 1.3% to $2.33 per share.

Management guided to fiscal 2026 sales growth of 2.5%-4.5% and comp sales growth of flat to 2.0%. They also guided to adjusted earnings of $14.69-$15.28 per share.

How shares responded: Home Depot’s shares rose 2% to close at $384.48 on Tuesday following the release of quarterly results. The stock had climbed more than 11% year to date.

What to watch: Investors will keep an eye on tariff-related announcements by the Trump administration after the US President announced a 10% tariff on all nations. The earnings release by rival Lowe’s Companies, scheduled for later today, will also remain in focus.

The markets today

The Australian dollar in focus today ahead of a basket of major economic reports

Context: The AUD/USD forex pair gained this morning as investors digested the latest inflation data.

Details: Data released this morning showed that the annual inflation rate remained at 3.8% in January, unchanged from the previous month. The figure came in higher than market estimates of 3.7%.

Meanwhile, the Reserve Bank of Australia’s trimmed mean CPI rose to 3.4% from 3.3% in the previous month. This, too, was higher than market estimates of 3.3%.

The latest data followed a report that showed unemployment reading remaining at a record low in January.

Investors now widely expect the central bank to hike its benchmark cash rate in May and announce another hike in November.

Other data released this morning showed total construction work in Australia declined 0.1% to A$80,011.8 million in the fourth quarter, missing market estimates of a 0.9% gain.

Weakness in the US dollar lent support to the AUD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell 0.1% to 97.79 this morning.

The AUD/USD pair rose around 0.5% to 0.7090 this morning, while the S&P/ASX 200 jumped 0.97% to trade at 9,109.60.

What to watch: Investors await the release of data on building capital expenditure (0430 UAE Time), plant machinery capital expenditure (0430 UAE Time) and private capital expenditure (0430 UAE Time) from Australia on Thursday. Private new capital expenditure on buildings and structures, which surged by 2.1% in the third quarter, is expected to rise by 1.6% in the fourth quarter.

Analysts expect private new capital expenditure on equipment, plant and machinery to decline by 2% in the fourth quarter, compared to 11.5% surge in the previous quarter. Total new capital expenditure in Australia, which climbed by 6.4% in the third quarter, is projected to grow by 0.3% in the fourth quarter.

Other Markets: US trading indices closed higher on Tuesday, with the Dow Jones index, S&P 5000 and Nasdaq 100 up by 0.76%, 0.77% and 1.09%, respectively.

The news shaping the markets

UK Secretary of State for Foreign Affairs Yvette Cooper said that almost 300 fresh sanctions had been imposed on Russia’s energy revenue. The news sent the USD/RUB pair higher in forex trading this morning.

South Korea’s Business Survey Index for the manufacturing sector slipped to 72 in February from 73 in the previous month. However, the Economic Sentiment Index surging to 98.8 in February exerted pressure on the USD/KRW forex pair.

Argentina’s economic activity surged 3.5% year-over-year in December, after a 0.1% decline in the previous month, which sent the USD/ARS pair lower in forex trading this morning.

Spain’s consumer confidence climbed sharply, with the headline indicator rising 4.7 points to 80.5 in January, lending support to the EUR/USD forex pair.

The American Petroleum Institute said that US crude oil inventories rose by 11.4 million barrels in the week ended February 20, compared to a decline of 0.61 million barrels in the previous week. However, spot prices for WTI crude oil rose this morning.

What else to watch today

European Central Bank’s non-monetary policy meeting (1200 UAE Time) and Eurozone’s inflation rate (1400 UAE Time), Spain’s PPI (1200 UAE Time), Brazil’s bank lending (1530 UAE Time), India’s M3 money supply (1530 UAE Time), US MBA mortgage applications (1600 UAE Time), EIA crude oil stocks change (1930 UAE Time), EIA gasoline stocks change (1930 UAE Time), Canada’s wholesale sales (1730 UAE Time), Mexico’s current account (1900 UAE Time), Russia’s industrial production (2000 UAE Time), as well as Argentina’s retail sales (2300 UAE Time).