HDBy Calypso Research7 min read

Home Depot (HD) Q4 2025 Earnings Analysis

Toolbox Tensions as Home Depot Drills Down 3.8% Revenue

Key Takeaways

Home Depot (HD) reported Q4 2025 earnings with revenue of $38.2B, representing a -3.8% year-over-year change. The stock moved +2.0% on earnings day.

The bull case: Home Depot’s deepening Pro ecosystem, SRS/GMS synergies, and continued share gains in a stabilized housing environment drive a return to steady mid-single-digit EPS growth once acquisition headwinds and housing turnover troughs are behind it.

The bear case: Persistent weak housing turnover, big-ticket project softness, tariff and SRS pricing pressures, and acquisition-driven margin dilution prolong an earnings plateau and delay the recovery in profitability and capital returns such as buybacks.

Financial Highlights

  • Revenue: $38.2B (-3.8% YoY)
  • Gross Profit: $12.5B (32.6% margin, -0.2% YoY)
  • Operating Income: $3.8B (10.1% margin, -1.2% YoY)
  • Net Income: $2.6B
  • TTM Revenue: $164.7B

Stock Performance

  • Earnings Day Move: +2.0%
  • Year-to-Date: +8.6%
  • 1-Year Return: -3.8%
  • vs. S&P 500 (since earnings): +7.0%
  • vs. Nasdaq (since earnings): +9.2%

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What Management Said

Here are the key debates and direct quotes from Home Depot's Q4 2025 earnings call:

Sustainability and Payoff of Pro / SRS / GMS Strategy in a Weak Roofing & Construction Market

Sentiment: Positive

"SRS was down low single-digit comps year-over-year for the fourth quarter. But if you look at the industry... total industry shipments of shingle squares were down 28% year-over-year... With that, SRS performed exceptionally and by all external measures, took share in the quarter." — Richard McPhail
"One particular example at the moment amongst many is the ability to turn a multifamily construction and property management company from a significant customer of one of our companies to be that way for all of Home Depot, HD Supply, SRS and GMS." — Michael Rowe

2026 Comp Outlook, Housing Turnover “Bottoming,” and Macro Sensitivity

Sentiment: Mixed

"We very purposely obviously have a range... of flat to 2%. We think the overall market is likely down 1% to up 1%. So in each instance, we believe within our range that we would be outperforming the market." — Edward Decker
"I don't necessarily think that's going to get any worse, but we're certainly bouncing along with what we hope would be a bottom in things like turnover." — Edward Decker

Tariffs, Pricing Actions, and Gross Margin Volatility (Including SRS Pricing Aggression)

Sentiment: Mixed

"If you think about -- our exposure was kind of mid-single digits. And then if you think of like SKU price, that's right about 3% just in terms of the impact. So we feel great about our position... we're mostly done with tariff-related pricing actions as it relates to the impacts back to April." — William Bastek
"With the dramatic fall in roofing shipments in 2024... SRS just took an opportunity, which we fully supported to take share... So we're not expecting a robust building materials environment in Q1, and we're happy to make the investments and take share." — Edward Decker

Shape of 2026 Earnings: Q1 Drag, GMS Dilution, and Margin Trajectory

Sentiment: Mixed

"We expect our first half gross margin to be down about 50 basis points versus last year, and our second half gross margin to be right around flat to last year... you're going to see the largest year-over-year impact to gross margin in the first quarter." — Richard McPhail
"Our expectations are that our year-over-year EPS performance will be mid-single-digit percentage negative in Q1, improving through the year, and this is solely due to acquisition, annualization and a few timing comparisons." — Richard McPhail

Consumer Health, Big-Ticket Discretionary Projects, and Mix Shift Toward Repair

Sentiment: Mixed

"That's really the telltale for us of when we think the demand profile is going to change for the upside. And we still have not seen that... we have not seen the increase in big ticket. And that will be a telltale for a turn in the market." — Edward Decker
"There's maybe a bit more repair than replace... people who think they're going to move and just waiting in more of a repair than a replacement cycle." — Edward Decker

Bull Case

Home Depot’s deepening Pro ecosystem, SRS/GMS synergies, and continued share gains in a stabilized housing environment drive a return to steady mid-single-digit EPS growth once acquisition headwinds and housing turnover troughs are behind it.

Bear Case

Persistent weak housing turnover, big-ticket project softness, tariff and SRS pricing pressures, and acquisition-driven margin dilution prolong an earnings plateau and delay the recovery in profitability and capital returns such as buybacks.

Looking Ahead

With revenue declining -3.8% year-over-year, investors will be watching for signs of a turnaround at Home Depot, particularly around sustainability and Payoff of Pro / SRS / GMS Strategy in a Weak Roofing & Construction Market. With operating margins at 10.1%, margin trends will remain a focal point. The muted stock reaction on earnings day suggests the market is taking a wait-and-see approach, and the next earnings report will be a key catalyst for the stock.

Frequently Asked Questions

What was Home Depot's revenue in Q4 2025?

Home Depot reported Q4 2025 revenue of $38.2B, representing a -3.8% year-over-year change.

Did Home Depot beat earnings expectations in Q4 2025?

The stock moved +2.0% on earnings day, suggesting the results were roughly in line with market expectations. The current bull case centers on: Home Depot’s deepening Pro ecosystem, SRS/GMS synergies, and continued share gains in a stabilized housing environment drive a return to steady mid-single-digit EPS growth once acquisition headwinds and housing turnover troughs are behind it.

What is the bull case for HD stock?

The bull case for HD centers on: Home Depot’s deepening Pro ecosystem, SRS/GMS synergies, and continued share gains in a stabilized housing environment drive a return to steady mid-single-digit EPS growth once acquisition headwinds and housing turnover troughs are behind it.

What is the bear case for HD stock?

The bear case for HD centers on: Persistent weak housing turnover, big-ticket project softness, tariff and SRS pricing pressures, and acquisition-driven margin dilution prolong an earnings plateau and delay the recovery in profitability and capital returns such as buybacks.

How has HD stock performed since its Q4 2025 earnings?

HD moved +2.0% on the day of its Q4 2025 earnings report, outperforming the S&P 500 by +7.0% since earnings. Year-to-date, the stock has returned +8.6%.

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