Home Depot (NYSE:HD) is the top-trending stock on social media today, and the shares are down about 4% this morning after the home-improvement retailer reported its fourth-quarter results. The company’s revenue came in below analysts’ average estimate, and it expects its sales to be little changed this year compared to 2022. On a positive note, the retail chain’s Q4 U.S. comparable sales and its bottom line did come in slightly above the mean estimate.

The downturn of the U.S. housing market, however, appears to be having a major, negative impact on Home Depot’s business. Nevertheless, the retailer intends to increase the compensation of its in-store employees by a total of $1 billion starting this year, and it raised its dividend by 10% to $2.09 per share.

Home Depot’s Results

Home Depot’s top line increased by 0.3% year-over-year to $35.8 billion, coming in $170 million below analysts’ average estimate. But the 0.3% YOY decrease in the company’s U.S. comparable sales was better than analysts, on average, had expected. And its Q4 earnings per share of $3.30 was slightly higher than the mean estimate of $3.29.

The company, however, expects its EPS to drop about 5% this year.

HD Stock and the Impact of the Housing Downturn

Ahead of HD’s results, Credit Suisse warned that housing “softness… should eventually weigh on the broader home improvement demand.” The firm gives HD a “neutral” rating.

The reduced time spent on home improvement by consumers following a surge in such activity during the pandemic is also likely having a negative impact on HD’s financial results. Instead, consumers are spending more time and money on recreational pursuits that they could not undertake during the pandemic.

On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.