Key Takeaways
Home Depot Inc. (HD) is set to report first-quarter results on Tuesday as investors watch for signs that a frozen housing market and persistent inflation continue to weigh on home-improvement spending. Consensus estimates call for a 4.3 percent year-over-year decline in earnings per share to $3.41, while revenue is expected to rise 4.3 percent to $41.59 billion.
"While we remain upbeat upon [the] underlying health of home improvement retail, we are becoming incrementally concerned that shorter-term macro headwinds may be turning more challenging, as rates shift higher, and confidence wanes,” Oppenheimer analyst Brian Nagel said ahead of the report.
The company’s shares have fallen more than 12 percent since the start of 2026, underperforming both the S&P 500’s nearly eight percent gain and rival Lowe’s (LOW), which is down less than 10 percent. The pressure comes as mortgage rates remain above six percent and April’s Consumer Price Index marked a nearly three-year high of 3.7 percent, eroding consumer purchasing power.
The report will be a critical test for the retailer during its key spring selling season. Hopes that homeowners would use higher home equity to fund remodeling projects rather than move have so far not been enough to meaningfully boost sales, and investors will be looking for signs that professional contractor demand can offset a cautious consumer.
Against a challenging macroeconomic backdrop, a stark divergence is emerging in the retail sector. Discount retailers like Walmart (WMT) are projected to perform well by gaining market share, including from high-income households trading down for groceries.
Conversely, home improvement giants Home Depot and Lowe’s, along with other retailers heavy on discretionary goods like Target (TGT), are more vulnerable. They continue to battle a stagnant housing market that has shown little sign of picking up, delaying a return to stronger sales growth.
The upcoming results will provide a crucial signal on the health of the U.S. consumer and their willingness to spend on big-ticket home projects. Any significant weakness in sales or a cautious outlook could further pressure Home Depot’s stock and negatively affect sentiment for the broader consumer discretionary sector.
This article is for informational purposes only and does not constitute investment advice.
