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Home Depot Faces Decline: Industry-Wide Slowdown or Company-Specific Challenge?

Home Depot Faces Decline: Industry-Wide Slowdown or Company-Specific Challenge?

Bitget-RWA2025/11/18 13:44
By:Bitget-RWA

- Home Depot shares slumped 2–3% premarket after Q3 2025 earnings missed profit forecasts and slashed full-year guidance. - Weak comparable sales growth (0.2% vs 1.3% expected) and housing market pressures highlighted sector-wide challenges. - GMS acquisition added $900M revenue but couldn't offset 1.6% transaction volume decline and margin pressures. - Analysts revised 2025 EPS forecasts down 5% as Stifel downgraded HD to "Hold," reflecting cyclical uncertainty. - Mixed investor reactions persist, with in

Home Depot (HD) shares dropped in premarket trading on November 18, 2025, after the home improvement giant posted third-quarter fiscal 2025 earnings that fell short of profit forecasts and sharply reduced its full-year guidance. The stock, which slipped around 2–3%, lagged behind major market indices,

about a drawn-out slump in the housing market and tepid demand for costly home projects.

The company announced adjusted earnings per share (EPS) of $3.74, missing the consensus range of $3.81–$3.84,

to $41.4 billion, narrowly topping analyst expectations.
Home Depot Faces Decline: Industry-Wide Slowdown or Company-Specific Challenge? image 0
Still, the revenue beat was in comparable sales—well under the 1.3% growth analysts had predicted—and a 5% cut to full-year adjusted EPS guidance. CEO Ted Decker as a consequence of subdued storm-related demand, persistent housing market headwinds, and consumer hesitancy, all of which weighed on sales in key segments such as roofing and generators.

Home Depot’s performance underscores the difficulties the home improvement industry faces as the housing market cools. Although the acquisition of GMS Inc. added about $900 million to revenue,

, with transaction counts dropping 1.6% from a year earlier. The average transaction value climbed 1.8%, boosted by inflation and professional customer spending, but to make up for the decline in customer visits.

The profit warning reverberated across Wall Street.

from "Buy" to "Hold" earlier in the week, citing worries about same-store sales and the housing market’s slowdown. adjusted EPS for fiscal 2025 to drop 5%, compared to the previous estimate of a 2% decrease, even as the sales growth outlook was modestly raised to 3%. The revised guidance highlights the company’s challenge in managing margin pressures—driven by increased operating costs and product mix changes—while pursuing long-term expansion.

Institutional investors have shown mixed reactions. While Empowered Funds LLC and Parnassus Value Equity Fund increased their holdings in Q2 and October 2025, respectively,

worth $19.6 million in the past quarter. This divergence illustrates both ongoing faith in Home Depot’s market leadership and short-term caution amid cyclical challenges.

Looking forward, the company’s prospects depend on broader economic trends. If housing activity stabilizes and the Fed lowers rates, demand for home improvement projects could rebound; however, continued high rates and affordability concerns may extend the downturn. Home Depot’s earnings call later Tuesday and Lowe’s report on Wednesday will

on whether the slowdown is industry-wide or unique to Home Depot.

At present, the stock trades at a forward P/E of 24.34,

experiencing slower growth. , with a consensus rating of "Moderate Buy" and an average price target of $429.33, but the recent earnings miss has increased scrutiny of the company’s ability to weather a sluggish housing market.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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