MW Home Depot's stock set to surge as sales growth provides signs of a turnaround

By Tomi Kilgore

Home improvement retailer sees 'relatively stable' demand throughout the quarter, even as the housing market continues to struggle

Home Depot's stock was set to surge after quarterly comparable sales snapped a streak of misses, and profit beat by the widest margin in years.

Shares of Home Depot surged in early Tuesday trading, after the home-improvement retail giant pleasantly surprised investors with growth in a key sales metric and beat profit expectations by the widest margin in years.

The company $(HD)$ also raised its quarterly dividend by 1.3%, and provided a full-year outlook that was mostly in line with Wall Street forecasts.

Comparable sales for the quarter to Feb. 1, or sales of stores open longer than a year, rose 0.4% from a year ago, while the average analyst estimate compiled by FactSet called for a 0.4% decline. That snapped a three-quarter streak of misses. Sales in U.S. stores rose 0.3% on the quarter.

The stock surged 3.3% in premarket trading. That put it on track for the best one-day postearnings performance since Nov. 14, 2023.

The results come a day before rival Lowe's Companies $(LOW)$ reports results. Home Depot's comparable sales have underperformed those of Lowe's the past two quarters, and analysts are also modeling for Lowe's sales to fall 0.4%.

Don't miss: How Lowe's stock has trounced Home Depot's - and what may lie ahead.

CEO Ted Decker said underlying demand remained "relatively stable" throughout the fiscal fourth quarter, but overall net sales fell from a year ago to snap a six-quarter streak of increases, as consumers continued to react to economic uncertainties, and as the housing market continued to struggle.

Net sales declined 3.8% to $38.2 billion, but topped the FactSet sales consensus of $38.1 billion.

Net income fell 14.2% from a year ago, while adjusted earnings per share, which excludes nonrecurring items, of $2.72 beat expectations of $2.53. That not only snapped a three-quarter streak of misses, but was the biggest beat since the fiscal first quarter of 2022.

The company projects fiscal 2026 comparable sales to be flat to up 2%, which compares with the current FactSet consensus of a 1.7% rise.

The company also expects total sales to grow 2.5% to 4.5% and adjusted EPS to be flat to up 4%. The current FactSet sales consensus of $171.21 billion implies 4% growth, while the EPS consensus of $15.09 implies a 2.7% rise.

Separately, the company raised its per-share quarterly dividend to $2.33 from $2.30, with the new dividend payable March 26 to shareholders of record on March 12. Based on Monday's stock closing price, the new annual dividend rate implies a dividend yield of 2.47%, which compares with the 1.75% yield of Lowe's stock and the implied yield for the S&P 500 index SPX of 1.17%.

Home Depot's stock has lost 1.4% over the past 12 months through Monday, while shares of Lowe's have climbed 15.7% and the S&P 500 has advanced 14.3%.

-Tomi Kilgore

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February 24, 2026 06:46 ET (11:46 GMT)

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