Home Depot has confirmed it will not raise prices in response to higher tariffs, despite reporting weaker-than-expected earnings for its fiscal first quarter.
The home improvement retailer posted adjusted earnings per share of $3.56 versus $3.60 expected, while revenue came in at $39.86 billion, slightly ahead of the $39.30 billion estimate.
Net income declined to $3.43 billion from $3.60 billion a year earlier.
The company noted that foreign exchange rates reduced total comparable sales by about 70 basis points in the first quarter of fiscal 2025.
Still, The Home Depot reaffirmed its full-year guidance, with total sales projected to grow by approximately 2.8% and adjusted diluted earnings per share expected to decline by about 2% from $15.24 in fiscal 2024.
Capital expenditures are forecast at roughly 2.5% of total sales.
Meanwhile, Chief Financial Officer Richard McPhail told CNBC that Home Depot’s diversified sourcing strategy shields it from the need to adjust pricing. “Because of our scale, the great partnerships we have with our suppliers and productivity that we continue to drive in our business, we intend to generally maintain our current pricing levels across our portfolio,” he said.
On the company’s earnings call, Home Depot executive Billy Bastek noted that maintaining prices could help attract more customers and suppliers. “It’s a great opportunity for us to take share, and it’s a great opportunity for our suppliers to take share as well,” he said.
However, tariffs could force Home Depot to raise prices on certain items and discontinue some product lines altogether. Bastek noted, “There are items that we have that could potentially be impacted from a tariff that, candidly, we won’t have going forward.”
Home Depot has increasingly focused on serving professional contractors, especially as higher interest rates slow the broader housing market. The recent acquisition of SRS Distribution, which supplies roofing, landscaping, and pool professionals, has strengthened that strategic push.
“Our first quarter results were in line with our expectations as we saw continued customer engagement across smaller projects and in our spring events,” said Ted Decker, chair, president and CEO. “We feel great about our store readiness and product assortment as spring continues to break across the country, and I would like to thank our associates for their continued hard work and dedication.”
At the time of writing, Home Depot's (NYSE: HD) stock was trading at US$377.05, easing 0.6% from Monday's close of $379.38. The stock reached a day low of $374.05 and a day high of $389.75. Home Depot's market cap stands at $374.76 billion.
