Home Depot sales top Street, earnings miss; not planning to raise prices
The Home Depot reported strong first-quarter sales even as its profit missed estimates.
The home improvement giant also said it doesn’t plan to raise prices because of higher tariffs.
“We intend to generally maintain pricing across our portfolio,” Billy Bastek, executive VP of merchandising, said on the company's earnings call. “We don’t see broad-based price increases for our customers at all going forward.”
Home Depot CEO Ted Decker told analysts on the call that the company has worked "diligently" with its vendors over the past several years to further diversify its global supply chain.
"As a result, we now have tremendous sourcing flexibility," Decker told analysts. "We are already taking action and anticipate that twelve months from now no single country outside of the United States will represent more than 10% of our purchases."
First Quarter
Home Depot’s net profit fell to $3.4 billion, or $3.45 a share, for the quarter ended May 4, from $3.6 billion, or $3.63 a share, in the year-ago period. Adjusted profit of $3.56 missed analysts’ estimate of $3.60 a share. It was the company’s first earnings miss since 2020.
Revenue increased 9.4% to $39.9 billion, topping estimates of $39.3 billion. Overall comparable sales edged down 0.3%. U.S. comps were up 0.2%.
On the earnings call, Decker said that high interest and mortgage rates and consumer uncertainty about the economy continue to put a dent into home spending for bigger projects.
“Our first quarter results were in line with our expectations as we saw continued customer engagement across smaller projects and in our spring events,” he stated in the earnings release.
While some retailers have pulled their guidance citing economic uncertainty, Home Deport reaffirmed its full-year guidance and said it expects sales growth of approximately 2.8% with an adjusted earnings decline of approximately 2% from $15.24 in fiscal 2024. It expects comparable sales growth of approximately 1%. The company plans to open 13 stores during the year.
At the end of the first quarter, the company operated a total of 2,350 stores and over 790 branches across all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.
