Core Viewpoint - Home Depot reported quarterly earnings of $4.68 per share, slightly missing the Zacks Consensus Estimate of $4.71 per share, reflecting a minor earnings surprise of -0.64% [1]. Financial Performance - The company posted revenues of $45.28 billion for the quarter ended July 2025, which was 0.5% below the Zacks Consensus Estimate, compared to $43.18 billion in the same quarter last year [2]. - Over the last four quarters, Home Depot has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2]. Stock Performance - Home Depot shares have increased by approximately 1.5% since the beginning of the year, while the S&P 500 has gained 9.7% [3]. - The current status of estimate revisions has resulted in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6]. Future Outlook - The current consensus EPS estimate for the upcoming quarter is $3.90 on revenues of $41.2 billion, and for the current fiscal year, it is $15.03 on revenues of $164.4 billion [7]. - The outlook for the Retail - Home Furnishings industry, where Home Depot operates, is currently in the bottom 20% of Zacks industries, which may impact stock performance [8].

Market Overview & Trends - Home Depot's sales momentum is lacking due to less accommodative interest rates, impacting the home improvement channel [2][3] - Summer-like weather helped Home Depot's sales growth slightly during the fiscal quarter [4] - Delays in large renovations are observed, with expectations of lower rates as a trigger for project commencement [9] - A 5% handle on the 30-year fixed mortgage rate could unlock significant remodeling demand [11] Company Performance & Strategy - Home Depot is managing wealth and is a well-run company in a solid sector, but lacks sales momentum [2] - Home Depot benefits from pent-up demand in the US housing market, which is expected to resurge as rates move lower [7] - Home Depot is making better and bigger moves in the complex pro business [15] Investment Recommendation & Valuation - Oppenheimer views Lowe's as a better investment play due to more operational slack and a wider valuation gap compared to Home Depot [13][15] - Lowe's operations are now very close to Home Depot's, but there's still a little more slack there [14] - Despite improvements at Lowe's, the valuation gap between Lowe's and Home Depot has remained very wide, making Lowe's cheap [15] Interest Rate Impact - Lower mortgage rates are expected to re-accelerate sales at Home Depot [7] - A move towards a 5% handle on the 30-year fixed mortgage rate is anticipated to unlock remodeling demand [11] - Lower HELOC (Home Equity Line of Credit) rates, influenced by Fed moves, could fuel remodeling demand by allowing homeowners to tap into historic equity [12]

Group 1 - The article discusses a controversial dividend combination involving two companies, one of which does not pay a dividend [1] - The author has disclosed a long position in shares of UNP, TPL, LB, and HD through various means [1] - The article expresses the author's personal opinions and is not influenced by compensation from any mentioned companies [1] Group 2 - Seeking Alpha clarifies that past performance does not guarantee future results and no specific investment advice is provided [2] - The views expressed may not represent those of Seeking Alpha as a whole, and the analysts are third-party authors [2] - Analysts may include both professional and individual investors who are not necessarily licensed or certified [2]

Financial Performance - Home Depot's earnings per share (EPS) was $4.68, missing the expected $4.71 [1] - Revenue reached $45.3 billion, slightly below the anticipated $45.35 billion [1] - Comparable sales increased by 1%, falling short of the expected 1.3% [1] - Foreign exchange rates negatively impacted comparable sales by approximately 40 basis points [2] Guidance and Outlook - Home Depot reaffirmed its full-year guidance despite the Q2 miss [2] - Same-store sales showed increasing strength throughout the quarter, with growth of 0.3% in May, 0.5% in June, and 3.3% in July [4] - The company believes the breadth of strength across different departments supports the reaffirmation of full-year guidance [4] Strategic Initiatives - Home Depot sources over 50% of its goods in the United States [6] - The company aims to reduce reliance on any single country outside the US for more than 10% of its products, targeting achievement by early next year [6] - Home Depot is seeing strength in larger ticket items for do-it-yourselfers, such as patios, grills, outdoor power equipment, and appliances [8] External Factors - Higher interest rates have been an issue for Home Depot and Lowe's, impacting big-ticket renovations [7] - Consumer strength picked up in May, June, and July [11]

Group 1 - Home Depot is set to release its Q2 earnings report before the market opens on Tuesday, with investors focusing on same-store sales growth and the state of the U.S. housing market [1] - Wall Street anticipates a 1.4% increase in same-store sales for Home Depot in the last quarter, following a 0.3% decline in Q1, marking a potential turnaround after eight consecutive quarters of decline globally [1] - The U.S. same-store sales are expected to rise by 1.6%, indicating three consecutive quarters of positive growth in the domestic market [1] Group 2 - The anticipated growth may be attributed to a lower year-over-year comparison base and a rebound in demand for large non-essential projects, with home improvement demand expected to improve as consumers adapt to high interest rates [1] - Revenue is projected to increase by 5% year-over-year to $42.4 billion, with adjusted earnings per share expected to be $4.72, surpassing the previous year's figures [1] - Home Depot reaffirmed its annual forecast in Q1, expecting a 2.8% increase in net sales and a 1% rise in same-store sales for the fiscal year [1] Group 3 - Although no guidance was provided for Q2, the Executive Vice President indicated that it is a peak season, with sufficient inventory and no stockpiling due to tariffs [1] - Home Depot plans to collaborate with suppliers and diversify procurement without raising prices, aiming for a maximum of 10% of procurement from any single country outside the U.S. within 12 months [1] - Following market expectations of a Federal Reserve rate cut in September, Home Depot's stock price has risen approximately 10% over the past month, while competitor Lowe's has seen a 15% increase [1] Group 4 - Analysts from Bank of America noted that despite macroeconomic fluctuations, Home Depot is expected to enhance its professional customer business through organic growth and acquisitions, continuing to gain market share [1]

Group 1 - Home Depot's same-store sales growth for Q2 was 1%, below the expected 1.39% [1] - Q2 sales revenue was $45.28 billion, compared to the forecast of $45.43 billion [1] - Adjusted earnings per share for Q2 were $4.68, slightly below the expected $4.72 [1] Group 2 - Home Depot continues to forecast an annual revenue growth of approximately 2.8% [1]

A key Home Depot sales metric came in shy of expectations in the latest quarter, a sign that consumers are staying away from big purchases https://t.co/hgJjz5S0H0 ...

[Performance Highlights & Outlook](index=1&type=section&id=Performance%20Highlights%20%26%20Outlook) The Home Depot reported a 4.9% increase in sales for the second quarter of fiscal 2025, reaching $45.3 billion, with comparable sales up 1.0%, and reaffirmed its full-year guidance anticipating total sales growth of approximately 2.8% and a slight decline in diluted earnings per share [Second Quarter Fiscal 2025 Performance](index=1&type=section&id=Second%20Quarter%20Fiscal%202025%20Performance) In Q2 FY2025, sales grew 4.9% year-over-year to $45.3 billion, driven by a 1.0% increase in comparable sales (1.4% in the U.S.), with net earnings stable at $4.6 billion, while diluted EPS saw a slight decrease to $4.58 from $4.60, though adjusted diluted EPS rose slightly to $4.68 Q2 FY2025 Key Financial Metrics | Metric | Q2 FY2025 | Q2 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $45.3 billion | $43.2 billion (approx.) | +4.9% | | Comparable Sales | +1.0% | N/A | N/A | | U.S. Comparable Sales | +1.4% | N/A | N/A | | Net Earnings | $4.6 billion | $4.6 billion | 0.0% | | Diluted EPS | $4.58 | $4.60 | -0.4% | | Adjusted Diluted EPS | $4.68 | $4.67 | +0.2% | - CEO Ted Decker noted that momentum from the latter half of the previous year continued, with customers engaging more in smaller home improvement projects[2](index=2&type=chunk) - Foreign exchange rates had a negative impact of approximately **40 basis points** on total company comparable sales[1](index=1&type=chunk) [Fiscal 2025 Guidance](index=1&type=section&id=Fiscal%202025%20Guidance) The company reaffirmed its guidance for fiscal 2025, projecting total sales growth of approximately 2.8% and comparable sales growth of 1.0%, while anticipating an adjusted operating margin of 13.4% and an approximate 2% decline in adjusted diluted EPS from fiscal 2024 Fiscal 2025 Full-Year Guidance | Metric | Guidance | | :--- | :--- | | Total Sales Growth | ~2.8% | | Comparable Sales Growth | ~1.0% (52-week basis) | | Gross Margin | ~33.4% | | Operating Margin | ~13.0% | | Adjusted Operating Margin | ~13.4% | | Diluted EPS | Decline ~3% from $14.91 | | Adjusted Diluted EPS | Decline ~2% from $15.24 | | Capital Expenditures | ~2.5% of total sales | - The company plans to open approximately **13 new stores** in fiscal 2025[3](index=3&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) The consolidated financial statements detail the company's performance, with net sales rising 7.0% to $85.1 billion for the first six months of fiscal 2025, while net earnings declined 2.2% to $8.0 billion, total assets increased to $100.0 billion, and operating cash flow decreased to $9.0 billion from $10.9 billion in the prior-year period [Condensed Consolidated Statements of Earnings](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) For the six months ended August 3, 2025, net sales grew 7.0% to $85.1 billion, but higher operating expenses (up 10.9%) led to nearly flat operating income at $11.7 billion, consequently decreasing net earnings by 2.2% to $8.0 billion, with comparable sales for the six-month period increasing by 0.4% Six Months Ended August 3, 2025 vs. July 28, 2024 | Metric (in millions) | Six Months FY2025 | Six Months FY2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $85,133 | $79,593 | +7.0% | | Gross Profit | $28,584 | $26,849 | +6.5% | | Operating Income | $11,688 | $11,613 | +0.6% | | Net Earnings | $7,984 | $8,161 | -2.2% | | Diluted EPS | $8.03 | $8.23 | -2.4% | Selected Sales Data (Q2 FY2025) | Metric | Q2 FY2025 | Q2 FY2024 | | :--- | :--- | :--- | | Comparable Sales (% change) | 1.0% | (3.3)% | | Comparable Customer Transactions (% change) | (0.4)% | (2.2)% | | Comparable Average Ticket (% change) | 1.4% | (1.3)% | | Average Ticket | $90.01 | $88.90 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of August 3, 2025, total assets stood at $100.0 billion, up from $96.8 billion a year earlier, supported by higher cash, receivables, and inventories, while total liabilities decreased to $89.4 billion from $92.4 billion, primarily due to a reduction in long-term debt, which significantly boosted stockholders' equity to $10.7 billion from $4.4 billion Balance Sheet Highlights (in millions) | Account | Aug 3, 2025 | Jul 28, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $2,804 | $1,613 | | Merchandise inventories | $24,843 | $23,060 | | Total current assets | $35,391 | $32,273 | | Total assets | $100,049 | $96,846 | | **Liabilities & Equity** | | | | Total current liabilities | $30,846 | $28,123 | | Long-term debt | $45,917 | $51,869 | | Total liabilities | $89,384 | $92,426 | | Total stockholders' equity | $10,665 | $4,420 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of fiscal 2025, net cash from operating activities was $9.0 billion, a decrease from $10.9 billion in the prior year, mainly due to changes in working capital, with net cash used in investing activities at $1.9 billion, and financing activities using $6.0 billion, largely for cash dividends ($4.6 billion), a significant reversal from the $6.1 billion provided by financing activities in the same period last year Cash Flow Summary (Six Months Ended, in millions) | Activity | FY2025 | FY2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $8,968 | $10,906 | | Net Cash used in Investing Activities | $(1,892) | $(19,098) | | Net Cash (used in) provided by Financing Activities | $(5,980) | $6,113 | | Change in Cash and Cash Equivalents | $1,096 | $(2,079) | | Cash and Cash Equivalents at end of period | $2,804 | $1,613 | [Non-GAAP Financial Measures](index=8&type=section&id=Non-GAAP%20Financial%20Measures) The company provides non-GAAP measures, including adjusted operating income and adjusted diluted EPS, to offer a clearer view of underlying business performance, with adjustments primarily excluding the amortization expense from acquired intangible assets to facilitate period-to-period comparisons - The company presents adjusted operating income, adjusted operating margin, and adjusted diluted EPS as supplemental, non-GAAP financial measures[18](index=18&type=chunk) - These non-GAAP measures exclude the impact of amortization expense from acquired intangible assets to help investors better analyze performance and compare with peers[18](index=18&type=chunk)[19](index=19&type=chunk) [Reconciliation of Adjusted Operating Income and Margin](index=8&type=section&id=Reconciliation%20of%20Adjusted%20Operating%20Income%20and%20Margin) For Q2 2025, GAAP operating income was $6.56 billion (14.5% margin), and after adding back $139 million in acquired intangible asset amortization, the non-GAAP adjusted operating income was $6.69 billion, resulting in an adjusted operating margin of 14.8% Q2 Adjusted Operating Income Reconciliation (in millions) | Metric | Q2 FY2025 | Q2 FY2024 | | :--- | :--- | :--- | | Operating income (GAAP) | $6,555 | $6,534 | | Acquired intangible asset amortization | $139 | $90 | | **Adjusted operating income (Non-GAAP)** | **$6,694** | **$6,624** | | Operating margin (GAAP) | 14.5% | 15.1% | | **Adjusted operating margin (Non-GAAP)** | **14.8%** | **15.3%** | [Reconciliation of Adjusted Diluted Earnings Per Share](index=8&type=section&id=Reconciliation%20of%20Adjusted%20Diluted%20Earnings%20Per%20Share) In Q2 2025, the GAAP diluted EPS of $4.58 was adjusted by adding back $0.14 for intangible asset amortization and subtracting a $0.04 tax impact, resulting in a non-GAAP adjusted diluted EPS of $4.68, a 0.2% increase from the prior year's $4.67 Q2 Adjusted Diluted EPS Reconciliation | Metric (per share) | Q2 FY2025 | Q2 FY2024 | | :--- | :--- | :--- | | Diluted EPS (GAAP) | $4.58 | $4.60 | | Impact of acquired intangible asset amortization | $0.14 | $0.09 | | Income tax impact of non-GAAP adjustment | $(0.04) | $(0.02) | | **Adjusted diluted EPS (Non-GAAP)** | **$4.68** | **$4.67** | [Company Information and Disclosures](index=2&type=section&id=Company%20Information%20and%20Disclosures) This section provides an overview of The Home Depot's operational scale, including its store count and employee numbers, and contains standard legal disclaimers regarding forward-looking statements and the use of non-GAAP financial measures [Company Overview](index=2&type=section&id=Company%20Overview) At the end of the second quarter, The Home Depot operated a total of 2,353 retail stores and over 800 branches across North America, employing over 470,000 associates, with its stock being a component of the Dow Jones Industrial Average and S&P 500 index - The company operated **2,353 retail stores** and over **800 branches** at the end of Q2[5](index=5&type=chunk) - Operations span all 50 U.S. states, D.C., Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces, and Mexico[5](index=5&type=chunk) - The company employs over **470,000 associates**[5](index=5&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section provides a standard cautionary note that the earnings release contains forward-looking statements based on current expectations, warning that these statements are not guarantees of future performance and are subject to various risks and uncertainties that could cause actual results to differ materially - The report contains "forward-looking statements" which are based on current information and expectations and are not guarantees of future performance[7](index=7&type=chunk) - These statements are subject to risks and uncertainties, including macroeconomic conditions, competition, and supply chain disruptions, which could cause actual results to differ materially[7](index=7&type=chunk)[8](index=8&type=chunk)

ATLANTA, Aug. 19, 2025 /PRNewswire/ -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $45.3 billion for the second quarter of fiscal 2025, an increase of $2.1 billion, or 4.9% from the second quarter of fiscal 2024. Comparable sales for the second quarter of fiscal 2025 increased 1.0%, and comparable sales in the U.S. increased 1.4%. For the second quarter of fiscal 2025, foreign exchange rates negatively impacted total company comparable sales by approximately 40 ba ...

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