Home Depot reaffirmed its full-year sales forecast while announcing it does not plan to raise prices despite ongoing tariffs affecting imports. The company’s Chief Financial Officer emphasized that thanks to Home Depot’s scale, strong supplier partnerships, and ongoing productivity improvements, the retailer intends to maintain current pricing levels across its product portfolio. Over half of Home Depot’s merchandise is sourced domestically within the U.S., and the company has diversified its import sources in recent years to reduce reliance on any single country, including China. By next year, no single foreign country will account for more than 10% of Home Depot’s purchases outside the U.S.
This pricing approach contrasts with Walmart’s recent announcement that it may increase prices as soon as late May to offset higher tariff costs. Home Depot’s strategy comes amid a sluggish housing market, which has caused sales to stagnate. The company sees stable pricing as a competitive advantage, offering an opportunity to capture greater market share while supporting its suppliers.
In its latest quarterly report, Home Depot missed earnings expectations for the first time since 2020 but surpassed revenue forecasts. The company reported adjusted earnings per share of $3.56, slightly below the anticipated $3.60, while revenue came in at $39.86 billion, exceeding estimates. Net income for the quarter ending May 4 was $3.43 billion, down from $3.60 billion the previous year. Despite these mixed results, shares in Home Depot experienced a modest increase in morning trading.
The housing market’s challenges are largely tied to persistently high interest and mortgage rates, which have dampened consumer confidence and spending on home improvement projects. CEO Ted Decker noted that while many homeowners are engaging in smaller-scale projects such as painting and yard work, larger renovations remain on hold. Home Depot expects total sales to grow by 2.8% for the full fiscal year, with comparable sales—excluding one-time factors like new store openings—forecast to rise by about 1%. This projection assumes the continuation of a U.S. agreement temporarily lowering tariffs on imports from China and other countries.
Comparable sales across Home Depot’s stores declined by 0.3% overall in the first quarter, although U.S. stores saw a modest 0.2% increase. The company experienced eight consecutive quarters of falling comparable sales prior to a slight improvement in the previous quarter. Sales trends improved as the quarter progressed, with February seeing a 3.3% decline attributed to poor weather, followed by gains of 1.3% in March and 1.8% in April. This momentum has carried into May.
Home Depot has also focused on expanding its business with home professionals, who account for a significant portion of its sales. The company’s acquisition of SRS Distribution, a supplier to roofing, pool, and landscaping contractors, contributed roughly $2.6 billion to year-over-year revenue growth, helping drive a total sales increase of about 9% when combined with new store openings.
Customer transactions through Home Depot’s stores and website rose 2.1% year over year in the quarter, with average spending per visit nearly unchanged at around $90. Home Depot serves a more affluent customer base compared to many retailers, with approximately 80% of its clientele being homeowners, often employing contractors for various projects.
Despite challenges, Home Depot saw strong sales during its spring promotional event and solid demand in categories such as appliances, garden, plumbing, and electrical products. However, sales in higher-ticket renovation categories like kitchen countertops and bathrooms remained soft. As of the most recent close, Home Depot’s shares have fallen about 2% year to date, lagging behind the broader market gains. The company’s market value stands near $377 billion.
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