Home Depot Flags Rising Consumer Caution as Storm Season and Housing Activity Slump

Home Depot trimmed its full-year profit forecast after a third quarter marked by subdued consumer demand, a mild storm season and persistent housing-market challenges.

What We Know

Home Depot reported third-quarter revenue of approximately $41.35 billion, surpassing expectations, but adjusted earnings per share fell to $3.74—below the anticipated $3.84—prompting a reduction in its full-year profit outlook to a 5 percent decline in adjusted EPS, up from a previously forecasted 2 percent drop. Comparable-store sales rose marginally, transactions fell, and the company cited a weak housing market and affordability concerns among consumers. A lack of storm-driven demand—often fueling sales of roofing and repair materials—also contributed to the disappointment. Shares fell 4 percent in pre-market trading.

What It Means

The results reflect an increasingly cautious consumer base delaying big-ticket home projects amid high borrowing costs, inflation and housing market stagnation. Milder weather, while benign, removed a recurring seasonal boost. Home Depot’s performance signals broader consumer and housing sector vulnerabilities, challenging assumptions of resilience even among spending traditionally supported by stable households.

The Backstory

Home Depot has weathered elevated interest rates and economic uncertainty by leaning on a balanced mix of pro and DIY customers. Still, persistent headwinds—including elevated mortgage costs, inflation pressure, and seismic shifts in housing turnover—have restrained demand. Earlier in the year, management flagged a growing pool of deferred household projects and cautioned that the expected revival from easing rates had yet to materialize.

What’s Next

Investors will monitor Home Depot’s fourth-quarter performance for signs of post-storm activity or renewed demand. With housing activity muted and weather less disruptive, analysts expect continued headwinds unless macroeconomic conditions ease or unexpected events spur renovation activity.

Market Reaction

Shares dropped roughly 4 percent following the earnings release, reflecting investor concern over deteriorating demand trends and the outlook for the year ahead.