Home Depot posts 5% sales growth in Q2 2025 and reaffirms full-year guidance

Overview

The Home Depot, the world’s largest home improvement retailer, reported steady Q2 2025 results, in line with expectations. Growth was driven by improved customer engagement in smaller home projects, while earnings held broadly flat year-over-year. The company emphasized continued market share gains and execution consistency across its store network.

CEO Ted Decker highlighted the company’s momentum in smaller projects, strong execution by associates, and steady share gains, reinforcing confidence in delivering on 2025 expectations: “Our second quarter results were in line with our expectations. The momentum that began in the back half of last year continued throughout the first half as customers engaged more broadly in smaller home improvement projects. Our teams are executing at a high level and we continue to grow market share. I would like to thank our associates for their continued hard work and dedication.”

Q2 2025 vs. Q2 2024:

• Net sales reached $45.3bn (+4.9% YoY), supported by higher ticket values and steady demand for home improvement projects.
• Comparable sales increased 1.0% YoY, with U.S. comps up 1.4%, as customers engaged more in smaller projects, though foreign exchange rates created a modest headwind of about 40 basis points.
• Customer transactions totaled 446.8m (-0.9% YoY), reflecting slightly lower traffic partially offset by higher spend per visit.
• The average ticket rose 1.2% YoY to $90.01, driven by inflationary effects and stronger sales of higher-value products.
• Gross profit increased to $15.1bn (+4.9% YoY), with margins steady at 33.4% as disciplined inventory and pricing management offset cost pressures.
• Operating income was $6.6bn (essentially flat versus last year), as higher SG&A expenses (+8.7% YoY) and depreciation costs offset the growth in gross profit.
• GAAP net earnings were $4.6bn (flat compared to Q2 2024), with diluted EPS of $4.58 (-0.4% YoY), reflecting expense and interest cost pressures.
• Adjusted EPS came in at $4.68, slightly above last year’s $4.67, excluding amortization of acquired intangibles and reflecting stable underlying performance.

Looking ahead, Home Depot reaffirmed its fiscal 2025 guidance, projecting total sales growth of approximately 2.8%, comparable sales growth of about 1.0%, and the opening of roughly 13 new stores, with gross margin expected at 33.4% and operating margin around 13.0% (adjusted 13.4%), alongside GAAP EPS down about 3% and adjusted EPS down about 2% year-over-year.

Despite Q2 results being somewhat impacted by trade tariffs, Home Depot’s decision to reaffirm its full-year 2025 outlook upward triggered a strong positive market reaction, with the stock gaining around +3% immediately after the report. Technically, the price now holds firmly above both the 50-day SMA ($372.13) and the 200-day SMA ($382.98), reinforcing the bullish stance. However, the RSI has climbed to 68.89, approaching overbought territory, which could lead to short-term pullbacks or retests of key support levels around the moving averages. Even so, the broader trend remains constructive, with the stock maintaining a year-to-date gain of nearly +5%.

Author: Ionuț-Adrian Lazar