Home Depot said on Tuesday that it cut its full-year profit forecast and missed analysts’ earnings targets last quarter, citing consumers’ reluctance to spend on housing amid economic uncertainty and elevated mortgage rates.
The big-box retailer, a bellwether for the housing market, said it expected adjusted earnings for the year would decline about 5 percent, a downgrade from its previous forecast of a 2 percent decline. The company also said sales at its U.S. stores open for at least one year rose only 0.2 percent last quarter, and the number of transactions fell 1.4 percent.
The company said on Tuesday it had observed a general slowdown as consumers cut back on remodeling projects and major upgrades. The whiplash of tariffs and mortgage rates, which have hovered above 6 percent, have kept people from buying and selling homes despite anticipation that the Federal Reserve would continue to lower interest rates.
“We believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand,” Ted Decker, chief executive of Home Depot, said in a statement.
Few major storms in the last quarter has also contributed to weaker demand, particularly for items like generators, plywood and roofing materials, the company said.
Despite the slowdown, the home retailer expects consumer demand will increase next year. That’s because as homes get older and owners gain more equity in their properties, the company’s executives said, spending on renovations will eventually take off.
“Can the Home Depot grow? The answer is yes,” Mr. Decker said on an earnings call Tuesday morning. “Will the industry have some shorter term pressures with turnover in home price? Yes, as well.”
Foot traffic at Home Depot in the third quarter dropped 0.4 percent from the previous year, according to Placer.ai, an analytics firm.
The company’s stock fell nearly 4 percent in early trading on Tuesday.
Kailyn Rhone is a Times business reporter and the 2025 David Carr fellow.
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