Home Depot's CEO, Edward “Ted” Decker, recently discussed how changing tax policy and easing economic uncertainty haven't yet prompted homeowners to feel more comfortable financing large-scale renovations. In a recent conference call, Decker and CFO Richard McPhail expressed their belief that the volume of substantial renovations needing financing won't change in the year ahead.
McPhail further added that their customers are still cautious about large remodeling projects due to the concern over the current rate environment. This cautiousness persists regardless of predictions that the Federal Reserve will soon begin lowering interest rates, which may potentially make borrowing more attractive for potential homeowners wanting to remodel or purchase a house.
Reportedly, homeowners have postponed approximately $50 billion in home improvement spending due to high interest rates. Home Depot, along with Lowe’s, have both confirmed this trend.
However, Home Depot recently reported their Q2 sales as $45.3 billion, slightly higher than analysts' projections, with earnings just missing expectations. Comparable sales also saw a 1% increase year-over-year, while $1,000-plus transactions increased by 2.6%, according to Decker.
Decker also highlighted the benefit of settled tax rates for homeowners and the positive impact of lowered taxes and rises in child tax credits. He says these changes could result in more discretionary spending from consumers.
Shares of Home Depot saw a 3% increase Tuesday, leading advancement in the Dow Jones Industrial Average. Investors appeared pleased with the news that the company maintained its forecast for the rest of 2025. The company restated its full-year outlook for sales to rise about 2.8%, and store sales to grow close to 1%.