By Sabrina Escobar and George Glover

Home Depot stock was rising Tuesday after the home-improvement retailer reported better-than-expected earnings for its fiscal fourth quarter.

Shares jumped 3.5% to $389.99 ahead of the opening bell. Futures tracking the S&P 500 were up 0.2%, rebounding following the previous session's artificial-intelligence selloff.

Home Depot reported adjusted earnings of $2.58 a share as revenue slipped 3.8% from a year ago to $38.2 billion. The fourth quarter of the company's fiscal 2025 consisted of 13 weeks, compared with 14 weeks for the prior year.

Analysts were forecasting earnings of $2.53 a share on revenue of $38.1 billion, according to FactSet.

Home Depot's same-store sales rose by 0.4% over the quarter, much better than the 0.4% drop that Wall Street was expecting.

Still, the retailer's guidance looked a little light. For the current fiscal year, it expects same-store sales growth of roughly flat to 2%. At the midpoint, that's weaker than the 1.7% growth that analysts were looking for.

CEO Ted Decker said the results were "largely in-line with our expectations, reflecting the lack of storm activity in the third quarter."

Store visits rose 2.7% last month, according to data from Placer.ai, likely driven by people preparing for the winter storm that has hit the north-east.

This is breaking news. Read a preview of Home Depot's earnings below and check back for more analysis soon.

Home Depot is stepping into the earnings spotlight Tuesday morning, carrying the weight of a stalled housing market that has chilled consumer demand for home improvement.

Analysts polled by FactSet are predicting Home Depot will post fourth-quarter adjusted earnings of $2.53 a share on $38.1 billion in revenue. Same-store sales are projected to dip by 0.4% year over year, reflecting the continuing demand challenges the home improvement industry has faced over the past few years.

Home improvement has been hard-hit by the multiyear slowdown in the housing market. People tend to embark on more expensive renovation projects before selling a house, or just after buying one. High interest rates and home prices have kept many home buyers on the sidelines, though, which has weighed on home improvement demand.

Investors and analysts have been hoping that lower rates would reignite both the housing market and the home improvement industry. That turnaround has yet to materialize -- and could fail to do so for a few quarters still.

At its December investor day, Home Depot warned that the challenges that have plagued the industry since 2023 will continue to weigh on demand.

"Looking forward to 2026, we anticipate these pressures will persist as we have not yet seen a catalyst for an inflection in housing activity," said Richard McPhail, Home Depot's chief financial officer, at the investor day.

Simeon Gutman, an analyst at Morgan Stanley, doesn't believe Home Depot will change its tune on Tuesday's earnings call. However, he does believe demand will rebound later this year or earlier next year -- and that it will be driven by modestly lower mortgage rates, resilient consumer spending, and an improvement in the housing market.

Indeed, Home Depot's monthly foot traffic shows signs of improving, with store visits up 1.3% year over year, on average, from November through January, according to data from Placer.ai. January saw a 2.7% increase in visits, likely driven by people preparing for the winter storm that blanketed much of the country.

The quarter's foot traffic trends suggest home improvement stores have seen a few months of positive momentum, according to Placer. Home Depot's fourth-quarter earnings will give investors a clue into whether that improvement represents a short-term fluke, driven by storm prep, or if it indicates that the much-awaited turnaround for the industry could finally be kicking off.

Home Depot stock has gained 11% this year.

"At some point in the next year, we expect consumers to stop putting off larger projects as the Fed has cut the Fed Funds rate," wrote Joseph Feldman, an analyst at Telsey Advisory Group.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 24, 2026 06:21 ET (11:21 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.