Home Depot Maintains Guidance Amid Earnings Miss
Home Depot has reaffirmed its full-year sales outlook even after missing Wall Street expectations for both earnings and revenue for the second consecutive quarter. This marks the first time since May 2014 that the home improvement giant fell short on both metrics.
The company projects total sales growth of 2.8% for fiscal 2025, with comparable sales—which exclude one-time factors such as store openings and calendar shifts—expected to rise approximately 1%.
Shares of Home Depot fell nearly 2% in premarket trading following the earnings release.
Fiscal Second-Quarter Performance
For the quarter ending August 3, 2025, Home Depot reported:
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Earnings per share (EPS): $4.68 adjusted vs. $4.71 expected
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Revenue: $45.28 billion vs. $45.36 billion expected
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Net income: $4.55 billion, down slightly from $4.56 billion the previous year
Despite the slight decline, revenue rose nearly 5% year-over-year, signaling modest growth in core operations.
Homeowner Spending Patterns Remain a Challenge
Chief Financial Officer Richard McPhail told CNBC that the company continues to see the effects of a “deferral mindset” among homeowners that began in mid-2023. Many are postponing home improvement projects due to economic uncertainty and higher borrowing costs.
However, McPhail highlighted encouraging trends:
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Big-ticket transactions over $1,000 increased 2.6%
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12 out of 16 merchandising departments posted year-over-year gains
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Monthly comparable sales improved sequentially: May 0.3%, June 0.5%, July 3.3%
“We saw momentum build across core categories throughout the quarter,” said McPhail.
Strategic Focus on Professional Customers
Home Depot has shifted focus toward professional contractors, who account for about 55% of sales, versus 45% from DIY customers. Strategic acquisitions, including SRS Distribution ($18.25B) and GMS ($4.3B), bolster this professional segment.
Comparable sales grew 1% overall and 1.4% in the U.S., despite a negative foreign exchange impact of 40 basis points.
Tariffs and Pricing Strategy
Rising tariffs on imported goods have created uncertainty for retailers. McPhail confirmed that Home Depot has not increased prices across stores, despite higher costs. Most imported products in the quarter arrived before the tariff hikes, helping maintain stable pricing.
Customer Trends and Digital Sales
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Transactions fell slightly to 446.8 million, down from 451 million last year
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Average spend per transaction rose to $90.01, up from $88.90
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Metrics exclude acquisitions SRS and HD Supply
Home Depot’s clientele—primarily homeowners and professional contractors—is financially resilient, which may help the retailer absorb ongoing cost pressures.
Stock Performance
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Shares closed at $394.70, up 1.5% year-to-date
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The S&P 500 gained nearly 10% over the same period
Home Depot continues to bet on pro contractors and large projects to drive growth while navigating a sluggish housing market and rising tariffs.
