Home Depot’s Comps Turn Positive in Second Quarter

Image Source: TradingView

By Brian Nelson, CFA

On August 19, Home Depot (HD) reported mixed second-quarter results with revenue coming in-line with expectations and non-GAAP earnings per share missing the consensus forecast slightly. Total sales came in at $45.3 billion, up 4.9% year-over-year, while the company’s comparable sales for the second quarter increased 1% (comparable sales in the U.S. increased 1.4%), up from a decline of 3.3% in last year’s quarter. Adjusted diluted earnings per share for the second quarter of fiscal 2025 were $4.68, up modestly from the same period last year.

Here’s what management had to say about the quarter:

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. Our teams are executing at a high level and we continue to grow market share. I would like to thank our associates for their continued hard work and dedication.

At the end of the second quarter, Home Depot had $2.8 billion in cash and cash equivalents, while total debt stood at $52.3 billion. For the six months ended August 3, net cash provided by operating activities was $9 billion, down from $10.9 billion in the year-ago period. Looking to guidance for 2025, management expects total sales growth of approximately 2.8%, with comparable sales growth of roughly 1% for the comparable 52-week period. It expects to add approximately 13 new stores. Home Depot’s guidance for 2025 calls for a gross margin of 33.4%, with an adjusted operating margin of roughly 13.4%. Adjusted diluted earnings per share is expected to decline 2% from $15.24 in fiscal 2024. Though Home Depot’s second quarter wasn’t blockbuster, it was good to see comparable store sales inflect. Shares yield 2.3% at the time of this writing.

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