From CNBC: 2025-05-20 12:08:00

Home Depot reported earnings of $3.56 per share, missing estimates of $3.60. Revenue for the quarter rose 9.4% to $39.86 billion, beating expectations. Comparable store sales dropped 0.3%, worse than expected. The company reiterated its full-year guidance and expects total sales growth of 2.8% this year.

Executives on the conference call noted improvements in sales trends, with comp store sales going from a 3.3% decline in February to a 1.8% increase in April. U.S. comps rose by 0.2%, exceeding expectations. The company plans to maintain current prices despite higher tariffs, aiming to win customers and avoid margin pressure.

Home Depot’s supply chain diversification strategy aims to ensure no country outside the U.S. represents over 10% of merchandise purchases. The company is not planning broad-based price increases due to tariffs, maintaining its margin outlook. Analysts questioned if this strategy would limit gross margin expansion, but executives see productivity as a key lever.

Despite challenges like high mortgage rates and tariff uncertainty, Home Depot remains optimistic about the housing market. The company believes there’s a $50 billion shortfall in home improvement spending, expecting an increase in larger remodeling projects. Positive feedback was also given on the progress of the SRS Distribution acquisition.

Investors were pleased with Home Depot’s performance, with the company checking key boxes for growth amid market challenges. The stock has rebounded, and the company’s strategic initiatives, such as supply chain diversification, maintaining prices, and focusing on professional contractors, are positively received. Analysts reiterate a buy-equivalent rating and price target of $440 per share.



Read more at CNBC:: Home Depot checks the most important boxes despite earnings miss