The Home Depot (HD) Q3 2025 earnings summary

Executive summary

• Q3 sales reached $40.2 billion, up 6.6% year-over-year, driven by hurricane-related demand, SRS acquisition, and favorable weather; U.S. comparable sales declined 1.2%.

• Net earnings for Q3 were $3.6 billion, with diluted EPS at $3.67, down from $3.81 last year; adjusted diluted EPS was $3.78.

• SRS acquisition contributed $2.9 billion in Q3 sales and is expected to add $6.4 billion in fiscal 2024.

• Pro sales outpaced DIY, with strong engagement in the Pro Ecosystem and digital sales up 4% year-over-year.

• Five new U.S. stores opened in Q3, bringing the total to 2,345; 13.7% of stores are in Canada and Mexico.

Financial highlights

• Gross margin was 33.4%, down 40 basis points year-over-year, mainly due to SRS mix; gross profit for Q3 was $13.4 billion.

• Operating margin was 13.5% (vs. 14.3% last year); adjusted operating margin was 13.8%.

• Interest and other expense rose to $625 million in Q3 due to higher debt balances.

• Inventory turnover improved to 4.8x from 4.3x year-over-year.

• Return on invested capital was 31.5%, down from 38.7% last year.

Outlook and guidance

• Fiscal 2024 sales growth expected at ~4%, with comparable sales down ~2.5%.

• Adjusted diluted EPS expected to decline ~1%, with the extra 53rd week contributing ~$0.30 per share.

• SRS expected to add $6.4 billion in sales; 12 new stores planned.

• Gross margin guidance at ~33.5%; operating margin at ~13.5%; effective tax rate ~24%.

• Capital expenditures for fiscal 2024 expected to be $3.0B–$3.5B, focused on new stores and customer experience.