The Home Depot has released a restrained preliminary outlook for its 2026 financial year, indicating that it does not expect a near-term rebound in the housing market.

For fiscal 2026, the Atlanta-headquartered company forecasts comparable sales to range from flat to an increase of up to 2%.

Total sales are projected to rise by between 2.5% and 4.5%.

The retailer is targeting an operating margin of 12.4% to 12.6%, with adjusted operating margin estimated at 12.8% to 13%.

Diluted earnings per share are expected to be between flat and up around 4%.

Home Depot also reaffirmed its full-year outlook for fiscal 2025. It continues to expect total sales growth of around 3%, with speciality building products distributor GMS, which it acquired in September 2025 for a total enterprise value of $5.5bn forecast to contribute roughly $2bn in additional sales.

Comparable sales for the comparable 52-week period are projected to be slightly positive. The retailer plans to open 12 new stores during the year and is guiding for a gross margin of around 33.2%.

Operating margin is expected to be approximately 12.6%, with adjusted operating margin at around 13%.

Diluted earnings per share are projected to decline by 6% from $14.91 in fiscal 2024, while capital expenditure is set at 2.5% of total sales.

In addition to its base case, the company outlined a market recovery scenario under more favourable conditions.

In that case, it sees total sales growth of between 5% and 6% and total comparable sales increasing by 4% to 5%.

Operating profit would be expected to grow at a faster rate than sales, and diluted earnings per share to rise in mid-to-high-single-digits.

Richard McPhail, chief financial officer, stated: “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. 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.

“In our accelerated recovery case, we could see sales and earnings per share grow faster in the event of a sharper housing recovery.” 

At the close of the third quarter of 2025, Home Depot operated 2,356 retail stores and more than 1,200 SRS locations across all 50 US states. The company employs more than 470,000 associates.