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Home Depot (HD) delivered a disappointing Q3, falling short of EPS expectations for the third consecutive quarter, with a $0.10 per share miss marking its largest EPS miss in over five years. The home improvement retailer also lowered its FY26 EPS guidance, now forecasting a 5% decline (to $14.48), versus prior estimates of a 2% decline, contributing to a steep drop in the stock this morning.

• HD cited a notably quiet hurricane and storm season as a primary reason for the weak results, which negatively affected key categories such as roofing, plywood, and generators.
• Broader consumer pressures and a sluggish housing market also weighed on demand, especially for big-ticket renovation projects that typically rely on financing.
• HD acknowledged that an anticipated Q3 demand lift failed to materialize, though asserted underlying demand remained stable relative to last quarter.
• On a modestly positive note, HD posted a slight revenue beat for Q3 and edged its FY26 revenue growth outlook higher to about 3% compared with the previous 2.8% estimate.
• The company also essentially reaffirmed FY26 comp guidance, now projecting slightly positive comp sales versus the prior outlook of +1%.
• Q3 comps increased a modest 0.2%, slowing from Q2’s 1.0% gain. Customer transactions fell 1.4%, but the average ticket rose to $90.39 from $88.65 yr/yr, largely attributed to trade-up for higher-ticket innovative products and modest price increases.
• The company also highlighted ongoing strength in Pro-heavy categories like gypsum, insulation, and plumbing, along with continued growth in digital sales, which rose 11% yr/yr.
• Commentary suggested that persistent housing market stagnation - currently at 40-year lows for turnover - plus continued consumer uncertainty around affordability and job security, are disproportionately damping home improvement demand.
• HD also leaned into its investments and recent GMS acquisition, which contributed approximately $900 mln to Q3 sales, and expects the acquisition to add $2 bln in fY26, but operating margin guidance was trimmed.

Briefing.com Analyst Insight:

HD’s results reinforce persistent housing and consumer headwinds across the home improvement sector. Q3’s EPS miss and downside FY EPS guidance lower the bar for rival Lowe’s (LOW), due to report results tomorrow. While management continues to push market share gains and invest in Pro ecosystem and digital initiatives, macro pressures appear entrenched -- investors should not expect a sharp turnaround until there is a genuine pickup in housing activity or renewed consumer strength. Near-term valuation looks less compelling as earnings visibility remains clouded by economic uncertainty and lack of cyclical catalysts.