Home Depot’s Lower Forecast Sets Stage for ’25 First Half

Home Depot has been one of the best performing retailers in the home improvement space but it sees a slower return for its business.

No retailer has been a better performer or been more indicative of the remodeling and home improvement sector than Home Depot so when it reduces its forecast for its upcoming business that’s as good an indicator as there is that the recovery is going to take a little longer than originally predicted.

In releasing its second quarter financial results earlier this month─which showed a slight increase in revenue, largely due to its acquisition of SRS Distribution─the DIY giant also continued to be less optimistic about business going forward.

This marked the seventh consecutive quarter where Depot registered negative comp sales. “During the quarter, higher interest rates and greater macro-economic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects,” said Ted Decker, president and CEO, said in announcing the results.

Those sentiments caused the giant retailer to take down its forecast for the balance of its year. It had previously projected comp sales to be down about 1 percent but with this most recent forecast, it is now saying comp sales should be off between 3 and 4 percent. The SRS acquisition will drive overall revenues up about 2.5 to 3.5 percent for the year, which also is impacted by a 53^rd week during this reporting year.

Lowe’s was reporting its numbers this week as well and it was expected they would be in the same general range as its bigger competitor.

Still Depot’s Decker remained confident for the longer range. “The underlying long-term fundamentals supporting home improvement demand are strong,” he said. But with these recent results it looks like the long-term is going to take a little longer to get here.

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