Home Depot Stock Slips on Q3 Earnings Miss and Soft FY25 EPS View

Core Insights - Home Depot Inc. reported third-quarter fiscal 2025 results with net sales exceeding estimates but earnings per share (EPS) falling short, reflecting year-over-year improvements in both metrics [1][4][5] Financial Performance - Adjusted EPS for the quarter was $3.74, a decrease of 1.1% from $3.78 in the same quarter last year, missing the Zacks Consensus Estimate of $3.81 [4] - Net sales rose 2.8% to $41.4 billion from $40.2 billion year-over-year, surpassing the Zacks Consensus Estimate of $41 billion [5] - Customer transactions decreased by 1.6% year-over-year to 393.5 million, while the average ticket size increased by 1.8% [6] Cost and Margin Analysis - Gross profit increased by 2.9% year-over-year to $13.8 billion, with a gross margin of approximately 33.4%, up 2 basis points from the previous year [10] - SG&A expenses rose 5.9% to $7.8 billion, representing about 18.5% of sales, an increase of roughly 60 basis points year-over-year [10] - Operating income was $5.4 billion, down 1.2% year-over-year, with an operating margin of about 12.9%, contracting 60 basis points [11] Future Outlook - Management has updated its fiscal 2025 outlook, expecting sales to increase by 3% year-over-year, reflecting a $2 billion contribution from the acquisition of GMS Inc. [14] - The company anticipates a gross margin of 33.2% and an operating margin of 12.6% for fiscal 2025, both lower than previous estimates [15] - EPS is expected to decline by 6% year-over-year, with adjusted EPS estimated to fall by 5% [16]