Residence Depot (HD) earnings Q2 2025

Residence Depot caught by its full-year outlook on Tuesday, at the same time as the corporate got here in barely shy of Wall Road’s expectations for quarterly earnings and income. 

The house enchancment retailer reiterated that it expects full-year whole gross sales to develop by 2.8% and comparable gross sales, which take out the influence of one-time elements like retailer openings and calendar variations, to rise about 1%. 

Nonetheless, it missed Wall Road’s earnings expectations for the second straight quarter. 

Shares of Residence Depot had been down about 2% in premarket buying and selling.

This is what Residence Depot reported for the fiscal second quarter in contrast with Wall Road’s estimates, in keeping with a survey of analysts by LSEG:

• Earnings per share: $4.68 adjusted vs. $4.71 anticipated 
• Income: $45.28 billion vs. $45.36 billion anticipated

Within the three-month interval that ended Aug. 3, Residence Depot’s web revenue was $4.55 billion, or $4.58 per share, down barely from $4.56 billion, or $4.60 per share, within the year-ago interval. Income rose nearly 5% from $43.18 billion within the year-ago interval.

The report is Residence Depot’s first since Could 2014 to fall quick on each earnings and income expectations.  

Residence Depot’s outcomes mirror that the corporate remains to be ready for a better pick-up in residence enchancment exercise, whether or not spurred on by increased housing turnover, decrease mortgage charges or shoppers’ personal shift in mentality. 

In an interview with CNBC, Chief Monetary Officer Richard McPhail mentioned the corporate continues to see the consequences of a “deferral mindset” from householders, which started in roughly mid-2023.

Nonetheless, McPhail mentioned, there are encouraging indicators within the retailer’s enterprise: Large-ticket transactions, which the corporate defines as over $1,000, rose 2.6% in comparison with the year-ago quarter. Twelve of its 16 merchandising departments posted year-over-year gross sales beneficial properties. And year-over-year gross sales tendencies improved in every month of the quarter, with comparable gross sales up 0.3% in Could, 0.5% in June and three.3% in July, he mentioned.

“We completely noticed momentum proceed to construct in our core classes all through the quarter,” he mentioned.

McPhail mentioned Residence Depot’s fiscal 2025 outlook doesn’t consider potential fee cuts by the Federal Reserve, which might spur borrowing for homebuying and larger tasks. 

“We do not embed any viewpoint on the speed atmosphere altering, nor on the demand for big tasks altering,” he mentioned. 

As the true property market stays sluggish and borrowing prices stay excessive, Residence Depot has regarded past the householders who come to its shops to purchase kitchen home equipment, cans of paint or different provides for do-it-yourself tasks. Residence Depot acquired SRS Distribution, an organization that sells provides to roofing, landscaping and pool professionals, for $18.25 billion final yr. It introduced in June that it was shopping for GMS, a specialty constructing merchandise distributor, for about $4.3 billion. The GMS deal is predicted to shut by the tip of Residence Depot’s fiscal yr in late January, in keeping with Residence Depot.

McPhail mentioned about 55% of Residence Depot’s gross sales come from professionals and about 45% comes from do-it-yourself prospects, when together with SRS. 

Comparable gross sales elevated 1% throughout the enterprise and 1.4% within the U.S. in the course of the fiscal second quarter. Residence Depot mentioned overseas trade charges negatively impacted the corporate’s comparable gross sales by about 40 foundation factors.

That comparable gross sales development marks solely the second quarter out of the final 11 that Residence Depot has reported year-over-year enchancment.

For the fiscal second quarter, McPhail mentioned year-over-year gross sales on each the professional facet and DIY facet of the enterprise grew. He declined to share proportion will increase, however mentioned these will increase had been “comparatively in keeping with each other.”

Tariffs have added uncertainty to the outlook for retailers, although. McPhail advised CNBC in Could that Residence Depot didn’t plan to hike costs throughout its retailer, at the same time as different retailers, together with Walmart, warned that tariff-related prices can be an excessive amount of to soak up.

Since Could, nevertheless, U.S. tariff insurance policies have modified. Increased tariffs started in early August on dozens of U.S. buying and selling companions. Different main agreements stay in flux. President Donald Trump final week delayed increased U.S. tariffs on Chinese language items for an additional 90 days as negotiations proceed.

McPhail advised CNBC Residence Depot hasn’t modified its pricing method. And, he mentioned, most of its imported merchandise offered within the quarter landed forward of tariffs. 

Residence Depot’s buyer base tends to be on stronger monetary footing than U.S. shoppers general, which might assist the corporate climate sustained increased prices. About 90% of its do-it-yourself prospects personal their very own properties and the house professionals that store with Residence Depot are likely to get employed by householders. 

Buyer transactions throughout Residence Depot’s web site and shops fell within the quarter to 446.8 million in comparison with the 451 million within the year-ago interval. But buyers spent barely extra throughout these transactions, with the typical ticket rising to $90.01 from a median ticket of $88.90 within the year-ago interval. These metrics exclude outcomes from acquisitions SRS and HD Provide, the corporate mentioned. 

Residence Depot’s shares closed on Monday at $394.70. As of Monday’s shut, the corporate’s shares are up roughly 1.5% thus far this yr. That trails the practically 10% acquire of the S&P 500 throughout the identical interval.

– CNBC’s Robert Hum contributed to this report.