Home Depot shares slide 4% on outlook cut citing weakening consumption 📉

Home Depot (HD.US) shares are falling almost 4% after reporting Q3 earnings at $3.74 per share, slightly below Bloomberg analysts consensus of $3.84 per share and down YoY from $3.78 per share a year ago, after also weaker than expected Q2 earnings report. Over the last four quarters, the company has surpassed consensus EPS estimates just once.

• The leading US furniture and home equipment company posted revenues of $41.35 billion for the quarter, only slightly above $41 billion market's estimate. The stock is down 10% since the beginning of the year and almost 25% since the all-time high.
• What's even more important, the company cuts its full-year outlook, citing weakening US consumers putting off home improvement projects amid historically high prices of services, goods and rising uncertainty around the state of the economy and employment.
• The US housing market remains sluggish, and Home Depot expects same-store sales for the full year to be "slightly positive," whereas it had previously expected a 1% increase for 2025. Full-year profits are also now expected to fall more sharply, with adjusted earnings per share forecast to drop by 5%, more than the 2% decline the company projected this summer, after Q2 report. 

Same-store sales rose 0.2% overall and just 0.1% in the US. The Street expected same-store sales to rise closer to 1.3% in the third quarter, so the number is really weak. For the broad stock market those earnings are the signal that the state of the US economy is at least mixed now, no more 'solid' nor 'robust' as historically high prices and still 'expensive' credit pressure demand even if payrolls are YoY higher.

Source: xStation5