The Home Depot Inc. (NYSE:HD) reported second-quarter fiscal 2025 sales of $45.277 billion, up 4.9% from $43.175 billion a year earlier, but slightly below Wall Street’s estimate of $45.356 billion.

Comparable sales rose 1.0%, with U.S. comparable sales increasing 1.4%. Foreign exchange rates weighed on results, reducing companywide comparable sales by 40 basis points.

Net earnings were $4.6 billion, or $4.58 per diluted share, compared with $4.6 billion, or $4.60 per share, in the prior year. Adjusted diluted earnings per share were $4.68, just above last year’s $4.67 but short of the $4.71 consensus estimate.

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“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,” said Ted Decker, chair, president, and CEO.

Operating income totaled $6.555 billion, with an operating margin of 14.5%, compared with $6.534 billion and 15.1% a year earlier. Adjusted operating income reached $6.694 billion, with an adjusted margin of 14.8%, down from $6.624 billion and 15.3% last year.

Comparable customer transactions declined 0.4% on a same-store basis, while total customer transactions fell 0.9% to 446.8 million. The average ticket increased 1.4% to $90.01, offsetting some of the decline in traffic.

For the first six months of fiscal 2025, net cash provided by operating activities was $8.968 billion, compared with $10.906 billion in the same period last year. Capital expenditures were $1.723 billion, acquisitions totaled $233 million, and dividends paid reached $4.574 billion.

At the quarter’s end, cash and cash equivalents were $2.804 billion, up from $1.613 billion a year earlier. Adjusted debt, which includes long-term borrowings, current maturities, and lease liabilities, declined to $61.321 billion from $64.612 billion in the prior year.

Return on invested capital (ROIC) was 27.2% (down from 31.9% a year earlier), while adjusted debt-to-EBITDAR improved to 2.2x from 2.5x, supported by EBITDAR of $27.325 billion versus $26.005 billion last year.

At the end of the quarter, Home Depot operated 2,353 retail stores and more than 800 branches, employing over 470,000 associates in the U.S., Canada, Mexico, and territories.

Tariffs

After the first-quarter release, CFO Richard McPhail had said the company had diversified its merchandise sourcing and would not raise prices despite higher tariffs. He added that, as higher interest rates slowed the housing market, Home Depot attracted more business from professional customers and expanded its reach through the acquisition of SRS Distribution, a distributor of roofing, pool, and landscaping supplies.

While tariffs were not explicitly mentioned in the second-quarter earnings release, the company expanded its forward-looking statement compared to the fourth quarter 2024 to include risks tied to “tariffs, trade policy changes or restrictions, or international trade disputes,” along with multiple references to supply chain diversification.

Outlook

Home Depot reaffirmed its fiscal 2025 outlook, guiding for approximately 2.8% sales growth and 1.0% comparable sales growth for the 52-week year. The company expects a gross margin of 33.4%, an operating margin of 13.0%, and an adjusted operating margin of 13.4%.

Diluted EPS is projected to decline about 3% to $14.46, compared with the $14.62 consensus estimate, while adjusted diluted EPS is forecast at $14.94, down 2% from last year and below the $15.00 estimate.

Full-year sales are expected to reach $163.980 billion, short of the $164.303 billion consensus, with capital expenditures at roughly 2.5% of sales.

Price Action: HD shares were trading lower by 0.33% to $396.00 premarket at last check Tuesday.

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