Home Depot’s Q4 sales jump 14% as extra week lifts revenue, but 2025 guidance signals caution

Home Depot delivered a strong financial performance in the fourth quarter of fiscal 2024, reporting $39.7 billion in sales, a 14.1% increase from the same period in fiscal 2023. This surge was largely attributed to the inclusion of a 14th week in the quarter, which alone contributed $2.5 billion in sales. Despite the headline growth, comparable sales in the U.S. increased only 1.3%, reflecting ongoing caution among homeowners when it comes to large-scale remodeling projects.

Net earnings for the quarter stood at $3.0 billion, translating to $3.02 per diluted share, compared to $2.8 billion or $2.82 per share in the fourth quarter of fiscal 2023. The extra week provided a $0.30 boost to diluted earnings per share, allowing the company to exceed initial market expectations. On an adjusted basis, diluted earnings per share reached $3.13, improving from $2.86 a year earlier.

CEO Ted Decker noted that greater customer engagement in home improvement projects contributed to the positive results, even as higher interest rates and economic uncertainty pressured discretionary spending. The company remained focused on long-term strategic investments to strengthen its position in an evolving market.

How Did Home Depot’s Full-Year 2024 Results Compare to 2023?

For fiscal 2024, Home Depot reported $159.5 billion in total sales, marking a 4.5% year-over-year increase. However, comparable sales declined by 1.8%—a clear indication that consumer spending patterns have shifted due to macroeconomic challenges and inflationary pressures.

Net earnings for the full year came in at $14.8 billion, down from $15.1 billion in fiscal 2023. Earnings per diluted share also fell slightly from $15.11 to $14.91. On an adjusted basis, diluted earnings per share stood at $15.24, nearly flat compared to the $15.25 recorded in the previous year.

The decline in comparable sales suggests that customers have become more selective in their spending, focusing on essential maintenance and smaller projects rather than major renovations. Rising interest rates have impacted home equity borrowing, a critical factor influencing larger home improvement expenditures.

What Led to Home Depot’s Dividend Increase?

Despite challenges in comparable sales growth, Home Depot announced a 2.2% increase in its quarterly dividend, raising it to $2.30 per share, or an annualized $9.20 per share. This marks the 152nd consecutive quarter that the company has paid a cash dividend, reinforcing its commitment to returning value to shareholders.

The dividend will be payable on March 27, 2025, to shareholders of record as of March 13, 2025. The increase reflects Home Depot’s confidence in its long-term financial stability and ability to generate strong cash flows despite fluctuating consumer demand.

What Are Home Depot’s Growth Expectations for Fiscal 2025?

Looking ahead to fiscal 2025, Home Depot expects moderate growth, with total sales projected to rise by approximately 2.8%. Comparable sales are forecasted to grow by around 1.0%, suggesting that while the company anticipates some improvement, consumer spending on home improvement may remain constrained.

The company plans to open 13 new stores, further expanding its retail footprint across North America. Gross margin is expected to be approximately 33.4%, while operating margin is projected at 13.0%, with an adjusted operating margin of 13.4%.

However, earnings per share are expected to decline by approximately 3%, with adjusted diluted earnings per share forecasted to fall by 2%. The company cited higher costs, shifting consumer spending habits, and inflationary pressures as key factors that could weigh on profitability in 2025.

Capital expenditures are expected to account for 2.5% of total sales, as Home Depot continues investing in supply chain enhancements, technology, and omnichannel capabilities to maintain its competitive edge.

What Challenges and Opportunities Lie Ahead for Home Depot?

Home Depot faces a complex retail environment shaped by fluctuating interest rates, labor costs, and evolving consumer preferences. The ongoing shift toward smaller-scale renovations rather than major remodeling projects indicates a fundamental change in the home improvement sector.

Despite these challenges, the company remains focused on strategic initiatives aimed at enhancing the customer experience, optimizing its supply chain, and leveraging technology to drive efficiency. Investments in digital platforms and in-store services are expected to bolster customer engagement and sales growth over the long term.

Analysts will be closely monitoring consumer spending trends and housing market conditions, as Home Depot’s performance is often seen as a barometer for the broader home improvement sector. The company’s ability to sustain growth while managing economic headwinds will be critical in shaping investor sentiment moving forward.

How Is Home Depot’s Stock Performing in Light of These Results?

Home Depot’s stock trades on the New York Stock Exchange under the ticker HD and is a component of both the Dow Jones Industrial Average and the S&P 500 Index. Following the earnings release, investor sentiment has been mixed, with market analysts weighing the company’s strong Q4 revenue growth against weaker full-year comparable sales and lower earnings guidance for 2025.

While the dividend increase and long-term strategic investments signal confidence, some investors remain cautious due to potential macroeconomic uncertainties and the impact of higher borrowing costs on home improvement demand.

Overall, Home Depot’s financial resilience, strong brand positioning, and consistent dividend growth continue to make it a key player in the retail and home improvement sectors, even as it navigates an evolving economic landscape.