Home Depot says it’s seeing “significantly reduced” demand for some of its merchandise as consumers remain cautious about an uncertain economy and job market, and hold off on home building and renovation projects.
The company also expects the trend to continue through 2026.
Details about the company’s latest earnings were discussed Tuesday in a conference call with investors and analysts. Publicly traded companies, like Home Depot, are required by law to regularly report earnings to maintain transparency and accountability with shareholders.
“Housing turnover has remained at historical lows since 2023, which has significantly reduced demand for projects and other purchases associated with buying and selling a home,” said chief financial officer Richard McPhail.
“Our customers also tell us they have concerns over general economic uncertainty, including inflation, growing job concerns, and higher financing costs.”
In the three months leading up to Feb. 1, 2026, Home Depot said sales fell 3.8 per cent from the same period a year earlier. The company notes the previous year had an extra week of sales.
The vast majority of Home Depot’s more than 2,300 stores are located in the U.S., where the company is headquartered, with hundreds of locations in Canada and Mexico.
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U.S. President Donald Trump’s tariff policies have left businesses and consumers feeling uncertain about the economy with concerns about how the trade war could evolve.
The Bank of Canada reported in December that many businesses in Canada have either paused or slowed hiring plans until the economy stabilizes, which may not happen in a meaningful way until the Canada-United States-Mexico Agreement, or CUSMA, gets an update or replacement.
This means if consumers are concerned about their job stability, they may be putting off plans to buy a home or do renovations.
Those who already own their homes may also be more focused on paying bills like the mortgage rather than doing renovations, with Canadian mortgage debt approaching $2 trillion, according to Equifax.
Home Depot says it doesn’t expect the economic situation to improve anytime soon, which could mean very modest growth or none at all for the rest of the year.
“As we look ahead to fiscal 2026, we anticipate these pressures will persist, as we have not yet seen a catalyst for an inflection in housing activity,” said McPhail.
“We expect to continue to grow our market share and for our comp sales to range between flat to two per cent growth.”
In the conference call, an analyst asked company executives to expand further why Home Depot was providing this somewhat weak full-year outlook of zero to two per cent growth.
“What may drive us to the lower end of the range would be, you know, if the market’s not performing as well. The number one driver of that would be continued consumer uncertainty. That’s still the number one reason why people are telling us, our customers are telling us, that they’re not investing, certainly in large projects,” said CEO Ted Decker.
“That has everything to do with consumer confidence and sentiment, jobs picture, overall, you know, price levels and affordability in the economy.”
Canada’s housing market is expected to remain “subdued” this year, according to the Canada Mortgage and Housing Corporation in a 2026 outlook report, with weak demand tied to economic uncertainty amid the global trade war and U.S. tariffs.
It adds that activity in the market is expected to pick up by later 2027 and 2028.
© 2026 Global News, a division of Corus Entertainment Inc.
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