Home Depot trims earnings guidance despite modest Q3 2025 sales lift

Core Insights - Home Depot reported a 2.8% increase in net sales for Q3 2025, totaling $41.4 billion, but reduced its full-year earnings outlook due to softer demand and macroeconomic pressures [1][2] - The acquisition of GMS contributed approximately $900 million to the total sales, accounting for about eight weeks of revenue [2] Sales Performance - Comparable sales increased by 0.2%, with US comparable sales rising by 0.1% [2] - Gross profit rose nearly 3% year-on-year to $13.81 billion [2] Earnings and Guidance - Net earnings remained unchanged at $3.6 billion, while diluted earnings per share decreased from $3.67 to $3.62 [2] - Operating income declined by 1.2% to $5.35 billion from $5.42 billion [2] - Home Depot now expects full-year sales growth of around 3%, with GMS projected to contribute $2 billion in additional revenue [4] - Adjusted earnings per share are anticipated to decline by approximately 5% from the previous year, a revision from earlier guidance of a 2% decrease [4] Future Plans - For fiscal 2025, Home Depot plans to open 12 new stores [5] - The company is targeting a gross margin of 33.2% and an operating margin of 12.6%, with an adjusted operating margin expected to be around 13% [5]