Home Depot’s third quarter results for 2025 were met with a notably negative market reaction following a modest year-on-year sales increase, as non-GAAP earnings per share came in below Wall Street’s consensus. Management attributed the underperformance primarily to an absence of storm activity, which significantly impacted key product categories such as roofing and power generation, as well as ongoing consumer uncertainty and housing market weakness. CEO Ted Decker remarked, “We believe the consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand.”

Is now the time to buy HD? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Home Depot’s Q3 Earnings Call

• Simeon Gutman (Morgan Stanley) asked for clarification on the margin impact of the GMS acquisition and storm-related sales pressures. CFO Richard McPhail explained the mix and expense effects, attributing roughly 20 basis points of operating margin impact to GMS and further deleverage to weaker-than-expected comp sales.
• Michael Lasser (UBS) questioned whether home improvement demand can recover without an uptick in housing activity or lower interest rates. CEO Ted Decker replied that while near-term headwinds persist, Home Depot can grow by taking share, even if the industry faces pressure.
• Zhihan Ma (Bernstein) inquired about the implied sales decline at GMS and the structural margin impact of recent acquisitions. McPhail clarified the timing and seasonality effects, emphasizing GMS’s ongoing share gains despite macro weakness.
• Seth Sigman (Barclays) pressed for details on slower transaction growth and the role of pricing or elasticity. EVP Billy Bastek confirmed transaction softness was mainly storm-related and that price increases were moderate and targeted to protect project value.
• Charles Grom (Gordon Haskett) asked about signs of fatigue among higher-income customers and regional differences. Decker stated there was no broad evidence of trade-down but noted some softening in larger project backlogs among Pro customers.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) signs of stabilization or improvement in housing turnover and consumer sentiment, (2) the effectiveness and margin impact of integrating GMS and SRS into Home Depot’s broader operations, and (3) continued progress in digital fulfillment and Pro customer engagement, especially as new AI-powered tools and project planning features are rolled out. Additional attention will be paid to seasonal weather events, which could drive variability in near-term results.

Home Depot currently trades at $336.55, down from $358.73 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

High-Quality Stocks for All Market Conditions

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.