Home Depot Inc
Q3 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +3.11%.
Did HD Beat Earnings? Q3 2025 Results
Home Depot delivered a mixed third quarter for fiscal 2025, posting revenue of $41.35 billion, up 2.8% year over year and slightly ahead of the $41.12 billion consensus, but falling short on the bottom line as adjusted diluted EPS of $3.74 missed the $3.83 analyst estimate by 2.45%. The primary culprit was an unusually quiet storm season, which stripped away the building-materials demand that typically provides a reliable lift in the period; CEO Ted Decker acknowledged that an anticipated improvement in underlying demand simply did not materialize. Comparable sales edged up just 0.2%, a fragile recovery from the prior year's 1.3% decline, as a 1.8% rise in average ticket to $90.39 only partially offset a 1.6% drop in customer transactions. Citi responded by trimming its price target on the stock to $407 from $422, though it kept its Buy rating intact. Looking ahead, Home Depot guided for roughly 3.0% total sales growth in fiscal 2025, with adjusted diluted EPS expected to decline approximately 5.0% from the prior year's $15.24 base.
- GMS acquisition contributed approximately $900 million in sales (approximately eight weeks)
- Comparable sales turned slightly positive at 0.2% after a 1.3% decline in the year-ago quarter
- Average ticket increased 1.8% to $90.39
- Lack of storms resulted in greater than expected pressure in certain categories
- Consumer uncertainty and continued pressure in housing disproportionately impacting home improvement demand
“Our results missed our expectations primarily due to the lack of storms in the third quarter, which resulted in greater than expected pressure in certain categories. Additionally, while underlying demand in the business remained relatively stable sequentially, an expected increase in demand in the third quarter did not materialize. We believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand.”
Home Depot CEO, on the earnings call
Forward Guidance & Outlook
The Home Depot updated its fiscal 2025 guidance (a 52-week year vs. a 53-week fiscal 2024) to reflect Q3 performance, continued pressure from lack of storm activity, ongoing consumer uncertainty, and housing pressure, plus the inclusion of GMS. Total sales growth is expected at approximately 3.0%, with GMS contributing approximately $2.0 billion in incremental sales. Comparable sales are expected to be slightly positive for the comparable 52-week period. Approximately 12 new stores are planned. Gross margin is guided at approximately 33.2%, GAAP operating margin at approximately 12.6%, and adjusted operating margin at approximately 13.0%. The tax rate is expected at approximately 24.5%, with net interest expense of approximately $2.3 billion. Diluted EPS is expected to decline approximately 6.0% from $14.91 in fiscal 2024, and adjusted diluted EPS is expected to decline approximately 5.0% from $15.24 in fiscal 2024. Capital expenditures are expected at approximately 2.5% of total sales.
HD YoY Financials
Figures from SEC filings and company reports. Not investment advice.