The Home Depot (HD) Q3 2025 earnings summary

Executive summary

• Third quarter sales reached $40.2 billion, up 6.6% year-over-year, with comp sales down 1.3% and U.S. comps down 1.2%.

• Net earnings for Q3 were $3.6 billion, or $3.67 per diluted share, down from $3.8 billion and $3.81 per share a year ago; adjusted diluted EPS was $3.78.

• SRS acquisition completed in June 2024, contributed $2.9 billion in Q3 and is expected to add $6.4 billion in sales for the year.

• Hurricane-related sales contributed $200 million, positively impacting comps by 55 basis points for the quarter.

• Five new U.S. stores opened in Q3, bringing the total to 2,345.

Financial highlights

• Gross margin was 33.4%, down 40 basis points year-over-year, mainly due to SRS mix.

• Operating margin was 13.5% (down from 14.3%); adjusted operating margin was 13.8%.

• Operating income for Q3 was $5.4 billion; adjusted operating income was $5.6 billion.

• Interest and other expense increased, with interest expense rising to $625 million in Q3 due to higher debt.

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

Outlook and guidance

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

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

• SRS expected to contribute $6.4 billion in incremental sales; 53rd week to add $2.3 billion.

• Gross margin guidance at ~33.5%; operating margin at ~13.5%.

• 12 new stores planned for the year.