Home Depot Flags Tariff And Supply Chain Risks In Risk Statement But Does Not Revise Outlook

Home Depot Inc. HD traded higher Tuesday after reporting first-quarter 2025 results and reaffirming its full-year outlook.

Sales rose 9.4% year over year to $39.86 billion, topping the $39.33 billion consensus. Adjusted earnings per share fell 3% to $3.56, missing the $3.60 estimate.

Overall comparable sales declined 0.3%, with U.S. comps gained 0.2% year-over-year. Foreign exchange weighed on total comp sales by about 70 basis points. Customer transactions grew 2.1%.

Home Depot did not explicitly mention tariffs in its first-quarter press release, but updated its forward-looking statement compared to the fourth quarter by expanding risks to include "tariffs, trade policy changes or restrictions, or international trade disputes" and supply chain diversification in multiple clauses.

Also Read: Home Depot Q1 Earnings Preview: Tariffs, Mortgage Comments, How Consumers Are ‘Changing Their Spending Habits'

Gross profit rose 8.3% year over year to $13.46 billion, with a margin of 33.8%, down 37 basis points.

Operating income increased 1.1% to $5.13 billion, while the operating margin fell to 12.9%, down 107 basis points. The adjusted operating margin declined to 13.2% from 14.1% a year earlier.

Operating expenses increased 13.2% year over year to $8.33 billion.

"Our first quarter results were in line with our expectations as we saw continued customer engagement across smaller projects and in our spring events," commented Ted Decker, chair, president, and CEO.

Operating cash flow for the quarter totaled $4.33 billion, down from $5.50 billion a year earlier. As of May 4, the company held $1.369 billion in cash and equivalents.

At the end of the quarter, HD operated 2,350 retail stores and over 790 branches across the U.S., Canada, and Mexico.

Home Depot reaffirmed it forecast of total sales growth of 2.8% year-over-year, reaching $163.98 billion, below the consensus of $164.17 billion.

Comparable sales are expected to rise approximately 1%, with an adjusted operating margin of around 13.4%.

The company anticipates adjusted earnings per share will decline about 2% to $14.94, lower than the $14.99 consensus estimate.

Price Action: HD shares are trading higher by 0.95% at $383 at the last check Tuesday.

Also Read:

• Walmart, Target, Home Depot CEOs Tell Trump Prices Will Rise — ‘Shelves Will Be Empty' If Tariffs Persist

Photo via Shutterstock