Home Depot expects flat market in 2026 as retailer awaits housing recovery

(Sharecast News) - US DIY retailer Home Depot has reiterated its guidance for the current year but pointed to a flat home improvement market in 2026, which is expected to limit sales growth in the near term.

The company, which operated from over 2,300 stores by the end of the third quarter, said that the home improvement market is expected to grow in the range of -1% to +1% next year, which should keep total sales growth to 2.5-4.5%.

At the mid-point, that's an improvement from the 3% growth estimated for 2025, but slightly below the 4.5% currently pencilled in by analysts. Earnings per share are expected to be flat to 4% higher than 2025.

However, the retailer said that once the housing market recovers, total sales growth could pick up to 5-6% in its 'Market Recovery Case' scenario.

"Our Market Recovery Case reflects our performance expectations once we see momentum in housing activity and increased spend on larger projects driven by pent-up demand," said chief financial officer Richard McPhail.

"We believe that the pressures in housing will correct and provide the home improvement market with support for growth faster than the general economy, and we expect to continue to grow faster than our market."

For 2025, Home Depot reaffirmed its targets for "slightly positive" comparable sales growth and a 6% decline in earnings per share from the $14.91 made in 2024.

The stock was up 0.5% at $351.72 in early deals on Wall Street.