Home Depot is growing again.
America’s largest 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. Home Depot also sounded an upbeat forecast for 2025, saying sales at stores open at least a year would grow by 1%.
Home Depot’s stock (HD) rose around 4% during early trading Tuesday.
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.
“The fact that US comparable sales are back in the black after declining for eight quarters or two years is a very clear win for Home Depot,” said Neil Saunders, an analyst at GlobalData Retail.
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.
Home Depot’s results were a positive sign after Walmart, the nation’s largest retailer, warned last week that 2025 would be a rockier year. Walmart said it expected sales to slow down amid concerns about inflation and tariffs. Walmart’s warning drove the Dow down about 450 points Thursday, and it has fallen every day since.
Home Depot said on a call with analysts Tuesday that it would be able to manage tariffs using its wide base of suppliers.
President Donald Trump recently enacted a 10% across-board-tariff on goods coming from China and 25% tariffs on all steel and aluminum imports. Trump plans to implement tariffs on Mexico and Canada in March and also pledged to impose “reciprocal tariffs.”
Home Depot was also asked on the call about immigration. The Trump administration has pledged to carry out mass deportations of undocumented immigrants in the United States.
The company said that there is a shortage of skilled trade workers in the United States, and it was unsure how mass deportations would worsen that. Economists and housing experts say mass deportations could drive up the price of housing.
“We’ve talked about having a shortage of skilled-trades folks in this country for some time,” Home Depot CEO Ted Decker said on the call. “We believe it’s like 400-odd-thousand trades, folks short, and not sure how that number would change with any meaningful change in immigration.”
