Home Depot's Sales Normalize After Pandemic, but Profits Remains Topnotch Given Competitive Edge

Home Depot is the world's largest home improvement retailer, set to deliver $153 billion in revenue in 2023. The firm earns a wide economic moat rating due to its economies of scale and brand equity. While Home Depot has realized strong historical returns as a result of its scale, operational excellence and concise merchandising remain key tenets underlying our modest margin expansion forecast. Its flexible distribution network should help elevate the firm's brand intangible asset, with faster time to delivery improving the do-it-yourself (DIY) experience and market delivery centers catering to the pro business. The success of ongoing initiatives should allow for modest operating margin expansion above prepandemic levels longer term, despite inflationary pressures and near-term economic turbulence.