How much of the Q4 sales decline was caused by the calendar difference?

The prior-year fourth quarter contained 14 weeks versus 13 weeks in fiscal 2025. The extra week added approximately $2.5 billion to sales and about $0.30 to diluted EPS, so the reported 3.8% sales decline understates underlying performance relative to a like-for-like comparison.

Why did comparable sales remain so weak despite a higher average ticket?

Comparable customer transactions fell 1.6% in Q4 and 1.0% for the year, indicating fewer shopping trips. Average ticket rose 2.4% in Q4 and 1.4% for the year, which partially offset the traffic decline. Management cited the absence of storm-related demand in Q3 and ongoing consumer uncertainty and housing pressure.

What does fiscal 2026 guidance imply for earnings?

Management guides to diluted EPS growth of roughly flat to 4.0% from $14.23, and adjusted EPS growth of flat to 4.0% from $14.69. Operating margin is expected at 12.4% to 12.6% (adjusted 12.8% to 13.0%), and net interest expense of about $2.3 billion. Sales growth of 2.5% to 4.5% includes contributions from acquisitions, while comparable sales are guided to flat to 2.0%.

Is the dividend at risk given the cash flow decline?

The board raised the quarterly dividend 1.3% to $2.33, signaling confidence. However, FY2025 cash dividends of $9.2 billion were close to operating cash flow of $16.3 billion less capex of $3.7 billion, leaving limited room after acquisitions. Investors should monitor free cash flow coverage, especially if working capital pressure persists.

Why do GAAP and adjusted EPS differ, and how large is the gap?

Adjusted EPS excludes amortization of acquired intangible assets, net of tax. For FY2025 the gap was $0.46 ($14.69 adjusted vs. $14.23 GAAP), and management expects an after-tax impact of about $0.50 in fiscal 2026. The amortization is rising due to acquisitions such as SRS and GMS, so the gap is likely to widen.

HD 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed February 24, 2026. Cited figures are marked; the original filing is the authoritative source.

The Home Depot reported fourth quarter and fiscal 2025 results on February 24, 2026, showing a soft year-end quarter and modest full-year performance.

Q4 sales were $38.2 billion^a, down 3.8% year over year, but this comparison is distorted by a 13-week quarter versus a 14-week prior-year quarter; the extra week contributed about $2.5 billion of sales and roughly $0.30 to EPS. Comparable sales rose only 0.4% in Q4 and 0.3% for the full year, with customer transactions declining 1.6% in the quarter and 1.0% for the year, offset by a higher average ticket. GAAP diluted EPS fell 14.6% to $2.58 in Q4 and 4.6% to $14.23 for fiscal 2025, while adjusted diluted EPS was $2.72 in Q4 (down 13.1%) and $14.69 for the year (down 3.6%).

Management attributed the Q4 softness to the absence of storm activity in Q3 and continued consumer pressure in housing, stating that underlying demand was relatively stable once storms are excluded. Fiscal 2026 guidance calls for total sales growth of about 2.5% to 4.5%, comparable sales of roughly flat to 2.0%, and diluted EPS growth of approximately flat to 4.0% from the $14.23^b base (adjusted EPS similarly flat to 4.0% from $14.69). Guided operating margin is 12.4% to 12.6%, with adjusted operating margin of 12.8% to 13.0%, and capital expenditures near 2.5% of sales.

The board raised the quarterly dividend 1.3% to $2.33^c per share, or $9.32 annualized, marking the 156th consecutive quarterly cash dividend. Balance sheet changes were notable: total debt-related liabilities shifted with short-term debt rising to $4.5 billion from $0.3 billion, goodwill and intangibles increased substantially following acquisitions (notably SRS and GMS), and cash flow from operations fell to $16.3 billion from $19.8 billion, driven by a $3.1 billion working capital outflow.

For investors, the key takeaways are that top-line growth is being driven more by acquisitions than by organic demand, free cash flow is under pressure relative to the dividend payout (cash dividends of $9.2 billion^d exceeded operating cash flow less capex of roughly $12.6 billion only modestly, though cash flow coverage has narrowed), and the fiscal 2026 guidance implies a return to only low-single-digit EPS growth at best. Dividend growth continues at a conservative pace, and the amortization of acquired intangibles creates a meaningful gap between GAAP and adjusted metrics that investors should monitor.

02—Key points

Key Highlights

Q4 FY2025 net sales of $38.2B, down 3.8% YoY, but the prior-year quarter had 14 weeks versus 13 weeks; the extra week added about $2.5B of sales and roughly $0.30 to EPS.
Comparable sales were nearly flat: +0.4% in Q4 and +0.3% for fiscal 2025, with customer transactions down 1.0% for the year and average ticket up 1.4%.
GAAP diluted EPS was $2.58 in Q4 (down 14.6%) and $14.23 for FY2025 (down 4.6%); adjusted diluted EPS was $2.72 in Q4 and $14.69 for FY2025.
Fiscal 2026 guidance: sales growth of 2.5% to 4.5%, comparable sales of flat to +2.0%, and EPS growth of flat to +4.0%, with operating margin of 12.4% to 12.6%.
Quarterly dividend raised 1.3% to $2.33 per share ($9.32 annualized), payable March 26, 2026, the 156th consecutive quarterly payment.
Operating cash flow fell to $16.3B from $19.8B, driven by a $3.1B working capital outflow, while short-term debt rose to $4.5B from $0.3B.
Goodwill and intangible assets increased materially (to $22.3B and $10.3B), reflecting acquisitions, with $5.4B in acquisition payments during the year.

03—Questions

Frequently Asked Questions

How much of the Q4 sales decline was caused by the calendar difference?
The prior-year fourth quarter contained 14 weeks versus 13 weeks in fiscal 2025. The extra week added approximately $2.5 billion to sales and about $0.30 to diluted EPS, so the reported 3.8% sales decline understates underlying performance relative to a like-for-like comparison.
Why did comparable sales remain so weak despite a higher average ticket?
Comparable customer transactions fell 1.6% in Q4 and 1.0% for the year, indicating fewer shopping trips. Average ticket rose 2.4% in Q4 and 1.4% for the year, which partially offset the traffic decline. Management cited the absence of storm-related demand in Q3 and ongoing consumer uncertainty and housing pressure.
What does fiscal 2026 guidance imply for earnings?
Management guides to diluted EPS growth of roughly flat to 4.0% from $14.23, and adjusted EPS growth of flat to 4.0% from $14.69. Operating margin is expected at 12.4% to 12.6% (adjusted 12.8% to 13.0%), and net interest expense of about $2.3 billion. Sales growth of 2.5% to 4.5% includes contributions from acquisitions, while comparable sales are guided to flat to 2.0%.
Is the dividend at risk given the cash flow decline?
The board raised the quarterly dividend 1.3% to $2.33, signaling confidence. However, FY2025 cash dividends of $9.2 billion were close to operating cash flow of $16.3 billion less capex of $3.7 billion, leaving limited room after acquisitions. Investors should monitor free cash flow coverage, especially if working capital pressure persists.
Why do GAAP and adjusted EPS differ, and how large is the gap?
Adjusted EPS excludes amortization of acquired intangible assets, net of tax. For FY2025 the gap was $0.46 ($14.69 adjusted vs. $14.23 GAAP), and management expects an after-tax impact of about $0.50 in fiscal 2026. The amortization is rising due to acquisitions such as SRS and GMS, so the gap is likely to widen.

04—Continue

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