With seasonal momentum, Home Depot sticks to its FY2025 plan

Overview

The Home Depot began fiscal 2025 with stable top-line growth and profitability in line with expectations, supported by resilient consumer demand for smaller projects and seasonal categories.

CEO Ted Decker stated: “Our first quarter results were in line with our expectations as we saw continued customer engagement across smaller projects and in our spring events. We feel great about our store readiness and product assortment as spring continues to break across the country, and I would like to thank our associates for their continued hard work and dedication.”

Q1 2025 vs. Q1 2024:

• Net sales increased to $39.86bn (+9.4% YoY), driven primarily by contributions from acquisitions (e.g., SRS) and slight positive comp in U.S. stores.
• Comparable sales declined slightly with -0.3% YoY, with U.S. comps at +0.2% YoY. FX impacted total comps by ~70 bps, while customer transaction count up +2.1%, average ticket flat.
• Gross profit rose to $13.46bn (+8.3% YoY), with a gross margin of 33.8%.
• Operating income (GAAP) was $5.13bn (+1.1% YoY), with operating margin of 12.9% (compared to 13.9% in Q1 2024), while adjusted operating income (non-GAAP) was $5.27bn (+2.7% YoY), with adjusted operating margin of 13.2% (compared to 14.1% last year).
• Net earnings decreased to $3.43bn (-4.6% YoY), with diluted EPS of $3.45 (-5.0% YoY) and adjusted diluted EPS of $3.56 (-3.0% YoY).
• SG&A expenses increased to $7.53bn (+12.9% YoY), while depreciation and amortization also grew to $796m (+15.9% YoY).
• Operating cash flow recorded a value of $4.3bn (down from $5.5bn YoY), primarily due to working capital changes.
• At the end of the first quarter, the company operated a total of 2,350 retail stores and over 790 branches across all 50 states, with a continued network expansion with 13 new stores expected in FY2025.
• Home Depot paid $2.29bn in dividends during the first quarter.
• The company did not repurchase any shares in Q1 FY2025, compared to $649m in the same quarter last year.
• Capital expenditures totaled $806m, representing approximately 2% of net sales.

Home Depot reaffirmed its guidance for fiscal year 2025, expecting approximately 2.8% total sales growth and comparable sales growth of around 1.0%, based on a 52-week year (vs. 53 weeks in FY2024). The company projects an adjusted operating margin of approximately 13.4% and anticipates adjusted diluted EPS to decline by about 2% year-over-year from the FY2024 baseline of $15.24. Gross margin is expected to remain stable at around 33.4%, while capital expenditures are forecasted at roughly 2.5% of total sales. Despite ongoing macroeconomic uncertainty, Home Depot remains focused on disciplined execution, spring seasonal demand, and continued engagement from both DIY and Pro customers.

After publishing below-expected financial results, HD stock recorded a moderate correction (-0.55%), signaling buyers’ restraint in the technical resistance area represented by the 200-day moving average. The overall structure remains constructive in the short term, but overcoming the resistance of ~$387 is essential to confirm a clear resumption of the upward trend. Otherwise, a consolidation in the range of $360-$385 is likely, waiting for a new fundamental or macroeconomic impulse. Currently, since the beginning of the year, the stock price of HD stock is still down by approximately -3%, after the strong downward trend that started in February.

Author: Ionuț-Adrian Lazar