The Home Depot, Inc. (HD) is doubling down on a bet that the housing market will eventually cooperate. At its 2025 Investor and Analyst Conference on Tuesday, the home improvement giant outlined strategic priorities, reaffirmed fiscal 2025 guidance, and set an early baseline for fiscal 2026 that includes a scenario where a housing recovery actually materializes.

The conference, which kicked off at 8:30 a.m., featured management explaining how the retailer plans to gain market share and create shareholder value by strengthening its core operations, delivering a seamless customer experience, and winning over professional contractors—the "pro" segment that's become increasingly important to the company's growth strategy.

CEO Ted Decker emphasized that recent investments have positioned Home Depot to compete aggressively for a slice of what he described as an approximately $1.1 trillion market. The question, of course, is when consumers and contractors will actually start spending again on big-ticket home improvement projects.

Fiscal 2025 Outlook Remains Unchanged

Home Depot stuck with its fiscal 2025 projections, calling for about 3% total sales growth and slightly positive comparable sales on a comparable 52-week basis. The company also maintained its margin and spending targets, including a gross margin around 33.2%, an operating margin near 12.6%, capital expenditures of roughly 2.5% of sales, and net interest expense of approximately $2.3 billion.

On the earnings front, Home Depot still expects diluted earnings per share to decline about 6% from fiscal 2024's $14.91, while adjusted diluted EPS is projected to drop around 5% from $15.24. The company noted it reports certain non-GAAP measures alongside GAAP results.

Early Look at Fiscal 2026

For fiscal 2026, Home Depot outlined a preliminary view that assumes the home improvement market will range from down 1% to up 1%—essentially treading water. Within that framework, the company expects comparable sales to be roughly flat to up 2%, with total sales growth of about 2.5% to 4.5%. The operating margin is projected to land between 12.4% and 12.6%, with diluted EPS expected to remain flat or increase by up to 4%.

The Housing Recovery Scenario

Here's where it gets more interesting. CFO Richard McPhail laid out what the company calls its "Market Recovery Case," which assumes a better housing environment and renewed spending on larger projects. Under this more optimistic scenario, Home Depot anticipates total sales rising by about 5% to 6% and comparable sales jumping 4% to 5%. Even better, operating profit would outpace sales growth, with EPS increasing in the mid- to high-single digits.

It's essentially a tale of two possible futures: one where the housing market stays sluggish and growth remains modest, and another where mortgage rates ease, existing home sales pick up, and people start tackling those kitchen renovations they've been putting off.

HD Price Action: Home Depot shares were down 2.11% at $342.51 during premarket trading on Tuesday, according to market data.