Company Reports

Home Depot is the world's largest home improvement retailer, set to deliver $172 billion in revenue in 2026. The firm's wide economic moat rating is based on its economies of scale and brand equity. Home Depot has realized strong historical returns due to its scale, operational excellence, and concise merchandising, which remain key tenets underlying our modest margin expansion forecast. Its flexible distribution network should help elevate the firm's brand intangible asset, with faster delivery time, improving the do-it-yourself experience, and market delivery centers catering to the pro business. We believe the success of ongoing initiatives should allow for operating margin expansion back to prepandemic levels longer term, despite intermittent inflationary pressures, macroeconomic uncertainty, and an increasing sales mix shift to distribution.

Home Depot's second-quarter sales grew 5.7%, helped by 1.7% same-store sales growth, the Gypsum Management & Supply acquisition, and new distribution branches. The adjusted operating margin of 14.7% (down 10 basis points) was hurt by higher costs, partially offset by $685 million in tariff refunds.

On Aug. 12, Home Depot announced that chair, president, and CEO Ted Decker is taking a temporary medical leave and is expected back within a few months. Senior EVP Ann-Marie Campbell and CFO Richard McPhail will lead the company during his absence.

Home Depot is the world's largest home improvement retailer, set to deliver $171 billion in revenue in 2026. The firm's wide economic moat rating is based on its economies of scale and brand equity. Home Depot has realized strong historical returns due to its scale, operational excellence, and concise merchandising, which remain key tenets underlying our modest margin expansion forecast. Its flexible distribution network should help elevate the firm's brand intangible asset, with faster delivery time, improving the do-it-yourself experience, and market delivery centers catering to the pro business. We believe the success of ongoing initiatives should allow for operating margin expansion back to prepandemic levels longer term, despite intermittent inflationary pressures, macroeconomic uncertainty, and an increasing sales mix shift to distribution.

Home Depot's first-quarter results included same-store sales growth of 0.6% and an adjusted operating margin of 12.3%. The firm's 2026 outlook is unchanged, calling for same-store sales growth of flat to 2%, an adjusted operating margin of 12.8% to 13.0%, and adjusted EPS growth of flat to 4%.

Home Depot is the world's largest home improvement retailer, set to deliver $171 billion in revenue in 2026. The firm's wide economic moat rating is based on its economies of scale and brand equity. Home Depot has realized strong historical returns due to its scale, operational excellence, and concise merchandising, which remain key tenets underlying our modest margin expansion forecast. Its flexible distribution network should help elevate the firm's brand intangible asset, with faster delivery time, improving the do-it-yourself experience, and market delivery centers catering to the pro business. We believe the success of ongoing initiatives should allow for operating margin expansion back to prepandemic levels longer term, despite intermittent inflationary pressures, macroeconomic uncertainty, and an increasing sales mix shift to distribution.

Home Depot eked out comparable sales growth of 0.3% in the fourth quarter, aided by 2.4% ticket growth but hurt by a 1.6% transaction decline. Weak top-line results led to cost deleverage, surfacing an adjusted operating margin that fell 120 basis points to 10.5%, slightly ahead of implied guidance.

Home Depot is the world's largest home improvement retailer, set to deliver $164 billion in revenue in 2025. The firm's wide economic moat rating is based on its economies of scale and brand equity. Home Depot has realized strong historical returns due to its scale, operational excellence, and concise merchandising, which remain key tenets underlying our modest margin expansion forecast. Its flexible distribution network should help elevate the firm's brand intangible asset, with faster delivery time, improving the do-it-yourself experience, and market delivery centers catering to the pro business. We believe the success of ongoing initiatives should allow for operating margin expansion back to prepandemic levels longer term, despite intermittent inflationary pressures, macroeconomic uncertainty, and an increasing sales mix shift to distribution.

Home Depot hosted its biennial investor day, reiterating its 2025 outlook for 3% sales growth and adjusted EPS decline of 5%. Capital allocation priorities were unchanged, with the firm focused on investing in the business, paying the dividend, and repurchasing shares.

Home Depot is the world's largest home improvement retailer, with more than $159 billion in revenue in 2024. The firm's wide economic moat rating is based on its economies of scale and brand equity. Home Depot has realized strong historical returns due to its scale, operational excellence, and concise merchandising, which remain key tenets underlying our modest margin expansion forecast. Its flexible distribution network should help elevate the firm's brand intangible asset, with faster delivery time, improving the do-it-yourself experience, and market delivery centers catering to the pro business. We believe the success of ongoing initiatives should allow for operating margin expansion back to prepandemic levels longer term, despite intermittent inflationary pressures, macroeconomic uncertainty, and an increasing sales mix shift to distribution.

Home Depot's third-quarter results included same-store sales growth of 0.2% and adjusted operating margin compression of 50 basis points, to 13.3%. The firm closed the GMS acquisition in September, which contributed $900 million in sales but added 15 basis points in operating margin headwind.

Home Depot is the world's largest home improvement retailer, with more than $159 billion in revenue in 2024. The firm's wide economic moat rating is based on its economies of scale and brand equity. Home Depot has realized strong historical returns due to its scale, operational excellence, and concise merchandising, which remain key tenets underlying our modest margin expansion forecast. Its flexible distribution network should help elevate the firm's brand intangible asset, with faster delivery time, improving the do-it-yourself experience, and market delivery centers catering to the pro business. We believe the success of ongoing initiatives should allow for operating margin expansion back to prepandemic levels in the longer term, despite intermittent inflationary pressures and macroeconomic turbulence.

Home Depot's second-quarter sales rose 4.9% on 1% same-store sales growth and the benefit of a full quarter of SRS Distribution sales. Steadily improving demand allowed the firm to maintain its 2025 outlook, including 2.8% sales and 1% comparable growth and a 13.4% adjusted operating margin.

Home Depot's subsidiary SRS will begin a cash tender offer to purchase all shares of GMS common stock for $110 per share, indicating a total enterprise value of approximately $5.5 billion. The transaction is predicted to be accretive to EPS in the first year of its tie-up, even without synergies.

Home Depot is the world's largest home improvement retailer, delivering more than $159 billion in revenue in 2024. The firm's wide economic moat rating is based on its economies of scale and brand equity. Home Depot has realized strong historical returns due to its scale, operational excellence, and concise merchandising, which remain key tenets underlying our modest margin expansion forecast. Its flexible distribution network should help elevate the firm's brand intangible asset, with faster delivery time, improving the do-it-yourself experience, and market delivery centers catering to the pro business. We believe the success of ongoing initiatives should allow for operating margin expansion back to prepandemic levels in the longer term, despite intermittent inflationary pressures and macroeconomic turbulence.

Home Depot delivered first-quarter sales growth of 9.4%, buoyed by its acquisition of SRS, but same-store sales fell 0.3%, hurt by a 70-basis-point foreign exchange headwind. Despite struggling home turnover, the firm held its full-year outlook for sales growth of 2.8% and adjusted EPS 2% lower.

Home Depot is the world's largest home improvement retailer, delivering more than $159 billion in revenue in 2024. The firm's wide economic moat rating is based on its economies of scale and brand equity. Home Depot has realized strong historical returns as a result of its scale, operational excellence and concise merchandising, all of which 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. We believe the success of ongoing initiatives should allow for operating margin expansion back to prepandemic levels in the longer term, despite intermittent inflationary pressures and macroeconomic turbulence.

Wide-moat Home Depot posted better-than-expected fourth-quarter revenue despite concern around the macro environment and consumer sentiment. Sales of $39.7 billion were above our $38.8 billion estimate, with comparable sales lifting 0.8%, marking the first positive quarter since 2022. The adjusted operating margin fell 40 basis points to 11.7% (below our 11.8% forecast) on costs related to the SRS integration, the impact of which should subside over the back half of 2025. We plan to maintain our $292 fair value estimate and see shares as nearly 35% overvalued, as we think the market is already pricing in the return of operating leverage when housing market improves. This is likely to take some time, however, given Home Depot's prognosis for depressed turnover and elevated interest rates to remain in 2025.

We're holding firm on our $292 fair value estimate for wide-moat Home Depot ahead of the fourth-quarter earnings release on Feb. 25. We consider the shares to be overvalued. We expect 11% sales growth for the quarter, to nearly $39 billion, benefiting from an extra week in the reporting period and sales from the SRS Distribution acquisition. If we carve out these idiosyncrasies, we expect a sales decrease of 0.6% on a comparable sales decline of 2.7%. We anticipate fourth-quarter results will rely on professional business demand, as do-it-yourself customers have paused big-ticket discretionary projects, which are often financed. Demand from pros should have held up in 2024’s final quarter, given that existing-home sales volume has returned to positive year-over-year growth. With housing turnover likely stabilized at depressed levels, we still think Home Depot should be primed to capitalize on its pro cohort with continued enhancements.

Home Depot is the world's largest home improvement retailer, delivering $153 billion in revenue in 2023. The firm's wide economic moat rating is based on its economies of scale and brand equity. Home Depot has realized strong historical returns as a result of its scale, operational excellence and concise merchandising, all of which 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 back to prepandemic levels in the longer term, despite intermittent inflationary pressures and macroeconomic turbulence.