home improvement retailer said Tuesday that sales at stores open for at least a year grew 0.8% last quarter, snapping eight straight quarters of sales declines. Additionally, Home Depot offered a positive outlook for the year 2025, predicting a 1% increase in sales at stores that have been open at least one year. In the early hours of Tuesday trading, the stock of Home Depot (HD) gained around 4%. It’s an encouraging sign for consumer spending on their homes and big-ticket purchases. Home Depot is bellwether of the US housing market and the economy.
According to GlobalData Retail analyst Neil Saunders, “the fact that comparable sales are back in the black after declining for eight quarters or two years is a very clear win for Home Depot.” Home Depot’s business is closely tied to the housing market, and high interest rates have put a brake on housing turnover and consumers financing larger projects.
In an interview with CNBC, Home Depot finance chief Richard McPhail said “housing is still frozen by mortgage rates.” But he said Home Depot saw broad growth last quarter, as sales increased in about half of its merchandise categories.
Still, Home Depot said it was seeing pressure on large remodeling projects, a sign consumers are strained by higher interest rates.
After Walmart, the nation’s largest retailer, warned last week that 2025 would be a more volatile year, Home Depot’s results were a positive sign. In light of concerns regarding inflation and tariffs, Walmart stated that it anticipated a slowdown in sales. The Dow dropped 450 points on Thursday as a result of Walmart’s warning, and it has since fallen every day.