Home Depot stuck by its full-year sales forecast despite missing Wall Street’s first-quarter earnings estimates. In a call with CNBC, CFO Richard McPhail said the retailer plans not to raise prices due to higher tariffs.
The company has diversified its merchandise sourcing and aims to maintain current pricing levels across its portfolio. More than half of Home Depot’s sales come from the US, and it has reduced its reliance on China by decreasing imports from that country.
In contrast, Walmart plans to raise prices in late May to cover higher costs from tariffs. The decision is at odds with Home Depot’s strategy, which may help take share in the market.
For the full year, Home Depot expects total sales to grow 2.8% and comparable sales to rise about 1%. Its forecast is based on a US agreement to temporarily lower tariffs to 30% on imports from China and to 10% for many other countries.
Despite this, Home Depot’s first-quarter earnings missed expectations, with revenue falling short of Wall Street estimates. The company reported revenue of $39.86 billion, down from $39.31 billion expected by analysts.
Home Depot’s sales growth has been muted due to a sluggish housing market and higher mortgage rates. However, the retailer has seen an increase in business from home professionals and acquired SRS Distribution, which sells supplies to roofing, pool, and landscaping professionals.
The company’s customer base is considered affluent, with 80% of customers being homeowners. Despite this, DIY customers are deferring bigger projects and engaging in smaller spring-related projects.
Home Depot’s shares have declined about 2% so far this year, trailing behind the S&P 500’s gains of approximately 1%.
Source: https://www.cnbc.com/2025/05/20/home-depot-hd-q1-2025-earnings.html