The Home Depot (HD) Q2 2025 earnings summary

Executive summary

• Q2 2024 sales reached $43.2 billion, up 0.6% year-over-year, including $1.3 billion from SRS acquisition.

• Comparable sales declined 3.3% overall and 3.6% in the U.S.; adjusted diluted EPS was $4.67, nearly flat year-over-year.

• Net earnings were $4.6 billion ($4.60 per diluted share), down from $4.7 billion ($4.65 per share) year-over-year.

• SRS acquisition completed June 18, 2024, contributing $1.3 billion in Q2 and expanding Pro offerings.

• Consumer demand weakened due to higher interest rates, macro uncertainty, and extreme weather, especially impacting large projects.

Financial highlights

• Gross margin improved by 40 bps to 33.4%, aided by lower transportation costs and shrink, partially offset by SRS mix.

• Operating margin was 15.1% (down from 15.4%); adjusted operating margin was 15.3%.

• Diluted EPS was $4.60, down 1%; adjusted diluted EPS was $4.67, flat year-over-year.

• Inventory turns improved to 4.9x from 4.4x; inventories at $23.1 billion, down $200 million.

• Online sales grew ~4% year-over-year; nearly half of online orders fulfilled through stores.

Outlook and guidance

• FY2024 total sales growth expected at 2.5%-3.5%, including SRS and a 53rd week.

• Comparable sales expected to decline 3%-4% for the 52-week period.

• SRS to contribute ~$6.4 billion in incremental sales; 53rd week to add ~$2.3 billion and ~$0.30 to EPS.

• Gross margin projected at ~33.5%; operating margin 13.5%-13.6%; adjusted operating margin 13.8%-13.9%.

• Adjusted diluted EPS to decline 1%-3% year-over-year.