I dropped by a Home Depot (HD) store yesterday. The aisles were fairly full; the paint displays were bright, drills and saws neatly arranged - but something didn’t feel quite right. The shoppers seemed intermittent, committed to smaller fix-ups rather than the big remodels that usually drive the heavy lifting for this company.
That anecdotal visit aligns closely with what we’re seeing in the data: the consumer is still active, but cautious - and that’s hitting consumer‐stocks, including Home Depot, hard.
The Consumer’s “Pause,” Not “Stop”
This morning, Home Depot reported that revenue rose 2.8% year-over-year to about $41.4 billion, but its comparable-sales growth came in at just 0.2%, well below the roughly 1.4% consensus.
Source: Stockanalysis.com
The company pointed out one odd factor: a lack of storms in Q3, which normally trigger heavy home-repair spending. But the broader message was equally important: there’s softness in large discretionary projects.
On top of that, Home Depot has cut its full‐year outlook because many consumers are deferring big home improvement jobs - kitchens, baths, major remodels - thanks to high interest rates and uneven housing turnover.
I literally walked past the big remodel displays yesterday and noticed fewer “talking with a contractor” moments and more “just grabbing a shelf bracket” moments. That’s the story.
What This Means For Consumer Stocks
The broader message for the consumer sector: not dead, but definitely scratching its head. Consumer‐stocks - especially those tied to discretionary spending, home goods, renovation - are trading under pressure because the heavy ticket items aren’t moving as fast. Investors are re-pricing expectations downward.
For Home Depot, this means the company is increasingly leaning on its “pro” customer (contractors, remodelers) and everyday DIY repairs rather than the big “let’s gut our kitchen” jobs. The mix shift and slower spending add risk to the macro narrative: if consumers are holding off on big expenditures, it may reflect broader caution about inflation, rates and employment.
My In-Store Take Felt It
Being at the store, I saw a good flow - but mostly smaller ticket purchases. The big bins of “kitchen cabinet systems” and “bathroom vanities” seemed less populated by customers than in past years. Which matches the management tone: “We continue to see softer engagement in larger discretionary projects,” CEO Ted Decker said.
That’s a red flag for anyone betting on a quick turnaround in home-improvement spending.
What To Watch Going Forward
Interest rates & housing turnover: If rates stay elevated or turnover stays low, fewer major projects will kick off.
Weather/storm events: Sometimes tailwinds like storms or natural disasters can boost repair spending - the lack thereof hurt Home Depot in Q3.
Consumer confidence & big-ticket spending: Are homeowners feeling flush enough to invest in large renovations? The signs are mixed.
Bottom Line
The consumer isn’t collapsing - but it’s definitely selective and cautious. And that means companies like Home Depot (and by extension many consumer-cyclical names) are facing a tougher environment than the headlines suggest. My walk through the store yesterday brought that home: plenty of activity - but not the full throttle of a robust era.
As I build my Select Portfolio 2026 and look into the consumer sector, the smart hedge is: focus on companies resilient to “pause” phases, not reliant on the big splash buys.
Because right now, the big splash buys are waiting for something to change - rate drops, housing shift, or a surge of events. Until then, expect more mid-ticket, stick-to-the-basics moves.
Heres to your future,
Matt McCall
Founder, NXT Wave Research
