In a second quarter boosted by consumers engaged in small household projects, The Home Depot posted better year-over-year comparable sales and generally positive results despite missing analyst estimates.
Net earnings for the first quarter were $4.55 billion, or $4.58 per diluted share, versus $4.56 billion, or $4.60 per diluted share, in the year-prior quarter. Adjusted for one-time events, diluted earnings per share for the period were $4.68 versus $4.67 in the year-earlier period, the company stated.
A Zacks Investment Research analyst consensus estimate called for earning per adjusted diluted share of $4.71 and revenues of $45.51 billion.
Comparable sales increased 1% year over year in the quarter even as comps in the U.S. increased 1.4%, Home Depot reported. Sales were $45.28 billion billion versus $43.18 billion in the year-previous period. Operating income was $6.56 billion versus $6.53 billion in the quarter a year past, while adjusted operating income $6.69 billion versus $6.62 billion.
The company reaffirmed its guidance for fiscal 2025, including sales up 2.8%, comps up 1% and diluted earnings per share down 3% and adjusted diluted sales down 2% year over year.
In a conference call, Billy Bastek, Home Depot executive vice president of merchandising, said the company initially wasn’t anticipating large-scale price increases due to changing tariff rates, noting it’s important “to remember that over 50% of our products are sourced domestically and wouldn’t be subject to any tariffs. Now some of the imported goods, obviously, tariff rates are significantly higher today than they were when we spoke in May. So as you’d expect there’ll be some modest price movement in some categories, but it won’t be broad based.”
Bastek added Home Depot is taking a portfolio approach and looking at project cost rather than just individual price to help balance cost to the consumer and professional customer.
“We’ll have a price leadership position in home improvement,” he maintained.
Ted Decker, Home Depot chair, president and CEO, said, “Over the last several years, our teams have done an incredible job partnering with our vendors to diversify product sourcing, which gives us unique flexibility in our supply chain. We will continue to work with our vendors to ensure that we have the right products at the right value in stock and on shelf for our customers to purchase.”
As for consumer purchasing across merchandise categories, Home Depot saw strength in seasonal products such as patio, grills and live goods, Bastek pointed out.
Decker said, “Our second-quarter results were in line with our expectations. The momentum that began in the back half of last year continued throughout the first half as customers engaged more broadly in smaller home improvement projects.”
