Home Depot(HD) - 2026 Q2 - Quarterly Results

Performance Highlights & Outlook 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 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] - Foreign exchange rates had a negative impact of approximately 40 basis points on total company comparable sales[1] Fiscal 2025 Guidance 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] Financial Statements 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 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 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 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 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] - 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][19] Reconciliation of Adjusted Operating Income and Margin 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 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 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 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] - Operations span all 50 U.S. states, D.C., Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces, and Mexico[5] - The company employs over 470,000 associates[5] Forward-Looking Statements 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] - 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][8]