Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

9c8a9467a294cf35ca359444820351788e617220d427c69b591663da6c5bbb1a

Sales per square foot

a34e0d25bce667d6414e477efad17fe2d6af52c2b8d4eae70097cbd5d80414f9

The Home Depot, Inc. is the world's largest home improvement retailer, providing a wide range of building materials, home improvement products, lawn and garden products, décor items, and facilities maintenance, repair, and operations products **[0000354950-24-000062_hd-20240128.htm:6]** **[0000354950-24-000062_hd-20240128.htm:71]**. These products are available both in physical stores and online across the U.S., Canada, and Mexico **[0000354950-24-000062_hd-20240128.htm:6]** **[0000354950-24-000062_hd-20240128.htm:71]**. In addition to products, the company offers services such as home improvement installation and tool and equipment rental **[0000354950-24-000201_hd-20240728.htm:11]** **[0000354950-24-000152_hd-20240428.htm:10]**.

1. **Building Materials** - Offers a variety of essential construction and renovation supplies, including departments like Building Materials, Electrical, Lumber, Millwork, and Plumbing.
2. **Décor** - Provides a wide selection of home enhancement products, featuring Appliances, Bath, Flooring, Kitchen & Blinds, Lighting, and Paint.
3. **Hardlines** - Includes a diverse range of products for home and garden needs, covering Hardware, Indoor Garden, Outdoor Garden, Power, and Storage & Organization.

8d9b6fa8abdf81ece332dd84a93b52fcf39c7205e76ad410dd9015fd601c6ab4

| Product Segment | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|-----------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Building Materials ($ million) | N/A | **14,079**  **[0000354950-23-000144_hd-20230430.htm:12]**  | **15,391**  **[0000354950-23-000185_hd-20230730.htm:13]**  | **14,744**  **[0000354950-23-000240_hd-20231029.htm:13]**  | N/A | N/A | N/A | N/A |
| Décor ($ million) | N/A | **12,251**  **[0000354950-23-000144_hd-20230430.htm:12]**  | **13,411**  **[0000354950-23-000185_hd-20230730.htm:13]**  | **12,653**  **[0000354950-23-000240_hd-20231029.htm:13]**  | N/A | N/A | N/A | N/A |
| Hardlines ($ million) | N/A | **10,927**  **[0000354950-23-000144_hd-20230430.htm:12]**  | **14,114**  **[0000354950-23-000185_hd-20230730.htm:13]**  | **10,313**  **[0000354950-23-000240_hd-20231029.htm:13]**  | N/A | N/A | N/A | N/A |
| Total Net Sales ($ million) | **35,800**  **[HD_3229003_6]**  | **37,257**  **[0000354950-23-000144_hd-20230430.htm:12]**  | **42,916**  **[0000354950-23-000185_hd-20230730.htm:13]**  | **37,710**  **[0000354950-23-000240_hd-20231029.htm:13]**  | N/A | **36,400**  **[HD_3388983_1]** **[HD_3388983_5]**  | **43,200**  **[HD_3398503_1]** **[HD_3398503_5]**  | **40,200**  **[HD_3407827_1]** **[HD_3407827_6]**  |

5c9e66a810c984ee37b98338e190b6a93527aa4c8110215fd3d1bd0222a71d64

| Metric [Unit: $ million] | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 |
|--------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Net Sales in the U.S.    | **34,507**  **[0000354950-23-000144_hd-20230430.htm:11]**  | **39,191**  **[0000354950-23-000185_hd-20230730.htm:13]**  | **34,544**  **[0000354950-23-000240_hd-20231029.htm:13]**  | N/A     | **33,569**  **[0000354950-24-000152_hd-20240428.htm:11]**  | **39,513**  **[0000354950-24-000201_hd-20240728.htm:12]**  | **37,135**  **[0000354950-24-000240_hd-20241027.htm:12]**  | N/A     |
| Net Sales Outside the U.S.| **2,750**  **[0000354950-23-000144_hd-20230430.htm:11]**  | **3,725**  **[0000354950-23-000185_hd-20230730.htm:13]**  | **3,166**  **[0000354950-23-000240_hd-20231029.htm:13]**  | N/A     | **2,849**  **[0000354950-24-000152_hd-20240428.htm:11]**  | **3,662**  **[0000354950-24-000201_hd-20240728.htm:12]**  | **3,082**  **[0000354950-24-000240_hd-20241027.htm:12]**  | N/A     |
| Total Net Sales          | **37,257**  **[0000354950-23-000144_hd-20230430.htm:11]**  | **42,916**  **[0000354950-23-000185_hd-20230730.htm:13]**  | **37,710**  **[0000354950-23-000240_hd-20231029.htm:13]**  | N/A     | **36,418**  **[0000354950-24-000152_hd-20240428.htm:11]**  | **43,175**  **[0000354950-24-000201_hd-20240728.htm:12]**  | **40,217**  **[0000354950-24-000240_hd-20241027.htm:12]**  | N/A     |

ebe79d74a486823157baefb0ba1a7be70f59ea3a356c51719ed30c0bf6fe925f

1. Given your guidance of a decline in diluted earnings per share by approximately 2% and operating margin decline for fiscal 2025, what specific factors are driving this decrease, and how do you plan to mitigate these pressures to improve profitability going forward?

2. Considering the potential impact of tariffs on products sourced from China and Southeast Asia, what percentage of your sales is exposed to these tariffs, and how are you diversifying your supply chain to mitigate this risk?

3. Can you provide more specifics on the progress of integrating SRS Distribution, particularly regarding cross-selling initiatives, and are there any challenges that have arisen in realizing the expected synergies?

4. You mentioned positive momentum in mitigating shrink. What are the specific strategies you've implemented to address shrink, and how significantly has shrink affected your financial performance in recent quarters?

5. Despite stating confidence in gaining market share, could you elaborate on which specific categories you're seeing underperformance, and what actions are you taking to address competitive pressures in those areas?

fbf642cf9edc6620bb2b80037d2ff1d0a0e13fe40c7f2f0974a8934263e41c5e

- Other home improvement retailers
- Local, regional and national hardware stores
- Electrical, plumbing and building materials supply houses
- Lumber yards
- Specialty design stores
- Showrooms
- Discount stores
- Paint stores
- Specialty and mass digital retailers
- Warehouse clubs
- MRO distributors
- Home décor retailers
- Providers of home improvement services
- Tool and equipment rental providers  **[0000354950-24-000062_hd-20240128.htm:25]** 

4152d5e511290fb2f6c1e71e8bb8271a12fd1569cea18ae58b9133e04a820767

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

Selling, General, and Administrative Expenses (SG&A) [USD, Millions]

Research and Development (R&D) [USD, Millions]

Depreciation and Amortization (D&A) [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

Earnings Per Share (EPS) - Basic [USD]

Earnings Per Share (EPS) - Diluted [USD]

088894fb5eec0581b1f872399e44b960c54a8569e7dfdb0c2252a87a6fad4791

bd504391039d611efed7f9cefd28d2e31bf40c24ebff70f47739707399c6d7a3

0a3e5165854b8c9e6d692f769b9d09885ed0a5e5e776ebb641bcd5b029462a67

United States

Outside the U.S.

Total Revenue

5d92b7ce7a085d0a5ca2c155ff49e42587fd50a4e7851979f6b24af444b3b693

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

### Q3 2025 Earnings Call
- **Issued Period**: Q3 2025
- **Guided Period**: FY 2024
- **Guidance**:
  - **Total Sales Growth**: Approximately **4%**, including contributions from SRS and the 53rd week  **[HD_3407827_6]** .
  - **Comparable Sales**: Expected to decline approximately **2.5%** for the 52-week period  **[HD_3407827_6]** .
  - **Gross Margin**: Expected to be approximately **33.5%**  **[HD_3407827_7]** .
  - **Operating Margin**: Expected to be approximately **13.5%**  **[HD_3407827_7]** .
  - **Adjusted Operating Margin**: Expected to be approximately **13.8%**  **[HD_3407827_7]** .
  - **Effective Tax Rate**: Targeted at approximately **24%**  **[HD_3407827_7]** .
  - **Net Interest Expense**: Expected to be approximately **$2.1 billion**  **[HD_3407827_7]** .
  - **Diluted Earnings Per Share**: Expected to decline approximately **2%** compared to fiscal 2023, with the extra week contributing approximately **$0.30 per share**  **[HD_3407827_7]** .
  - **Adjusted Diluted Earnings Per Share**: Expected to decline approximately **1%** compared to fiscal 2023, with the extra week contributing approximately **$0.30 per share**  **[HD_3407827_7]** .
  - **New Stores**: Plan to open approximately **12 new stores**  **[HD_3407827_7]** .

### Q2 2025 Earnings Call
- **Issued Period**: Q2 2025
- **Guided Period**: FY 2024
- **Guidance**:
  - **Total Sales Growth**: Expected between **2.5% and 3.5%**, including the SRS acquisition and the 53rd week. The 53rd week is projected to add approximately **$2.3 billion** to total sales, and SRS is expected to contribute approximately **$6.4 billion** in incremental sales  **[HD_3398503_6]** .
  - **Comparable Sales**: Expected to decline between **negative 3% and negative 4%** for the 52-week period  **[HD_3398503_6]** .
  - **New Stores**: Expect to open approximately **12 new stores**  **[HD_3398503_6]** .
  - **Gross Margin**: Expected to be approximately **33.5%**  **[HD_3398503_6]** .
  - **Operating Margin**: Expected to be between **13.5% and 13.6%**  **[HD_3398503_6]** .
  - **Adjusted Operating Margin**: Expected to be between **13.8% and 13.9%**  **[HD_3398503_6]** .
  - **Effective Tax Rate**: Targeted at approximately **24%**  **[HD_3398503_6]** .
  - **Net Interest Expense**: Expected to be approximately **$2.2 billion**  **[HD_3398503_6]** .
  - **Diluted Earnings Per Share (EPS)**: Expected to decline between **negative 2% and negative 4%** compared to fiscal 2023, with the extra week contributing approximately **$0.30**  **[HD_3398503_6]** .
  - **Adjusted Diluted EPS**: Expected to decline between **negative 1% and negative 3%**, compared to fiscal 2023, with the extra week contributing approximately **$0.30**  **[HD_3398503_6]** .

### Q1 2025 Earnings Call
- **Issued Period**: Q1 2025
- **Guided Period**: FY 2024
- **Guidance**:
  - **Gross Margin**: Expected to be approximately **33.9%**, an increase of approximately 50 basis points compared to fiscal 2023  **[HD_3388983_6]** .
  - **Operating Margin**: Expected to be approximately **14.1%**  **[HD_3388983_6]** .
  - **Effective Tax Rate**: Targeted at approximately **24.5%**  **[HD_3388983_6]** .
  - **Net Interest Expense**: Expected to be approximately **$1.8 billion**  **[HD_3388983_6]** .
  - **Diluted Earnings Per Share Growth**: Targeted to be approximately **1%** compared to fiscal 2023  **[HD_3388983_6]** .
  - **Total Sales Growth**: Expected to outpace sales comp with sales growth of approximately **positive 1%**  **[HD_3388983_5]** .
  - **Comp Sales**: Expected to be approximately **negative 1%**  **[HD_3388983_5]** .
  - **53rd Week Contribution**: Expected to contribute approximately **$2.3 billion** in sales  **[HD_3388983_5]** .

### Q4 2024 Earnings Call
- **Issued Period**: Q4 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Total Sales Growth**: Approximately **positive 1%** compared to fiscal 2023, benefiting from a 53rd week and acquisitions and new store openings  **[HD_3374018_8]** .
  - **Comp Sales**: Approximately **negative 1%** compared to fiscal 2023  **[HD_3374018_8]** .
  - **Gross Margin**: Expected to be approximately **33.9%**, an increase of approximately 50 basis points compared to fiscal 2023  **[HD_3374018_8]** .
  - **Operating Margin**: Expected to be approximately **14.1%**  **[HD_3374018_8]** .
  - **Effective Tax Rate**: Targeted at approximately **24.5%**  **[HD_3374018_8]** .
  - **Net Interest Expense**: Expected to be approximately **$1.8 billion**  **[HD_3374018_8]** .
  - **Diluted Earnings Per Share Growth**: Targeted to be approximately **1%** compared to fiscal 2023, with the extra week contributing approximately **$0.30**  **[HD_3374018_8]** .
  - **Capital Expenditures**: Approximately **2% of sales** on an annual basis  **[HD_3374018_8]** .
  - **Return of Excess Cash**: Intent to return excess cash to shareholders in the form of share repurchases after investing in the business and paying dividends  **[HD_3374018_8]** .

97f5e83f916e6523199c046adff427d1f28d0e6c7e39c11635a4767cdc79452e

| Name                  | Position                                             | Start Date          | Short Bio                                                                                                                                                                                                 |
|-----------------------|------------------------------------------------------|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Edward P. Decker      | Chair, President, and CEO                            | March 2022          | Edward P. Decker has been serving as the Chair, President, and CEO since March 2022. He became the Chair in October 2022. He joined The Home Depot in 2000 and has held various strategic planning roles  **[0000354950-24-000062_hd-20240128.htm:108]** **[0000354950-24-000108_hd-20240401.htm:36]** **[0000354950-23-000059_hd-20230129.htm:104]** **[0000354950-23-000101_hd-20230330.htm:1]** . |
| Richard V. McPhail    | Executive Vice President and CFO                     | September 2019      | Richard V. McPhail has been the Executive Vice President and CFO since September 2019. He joined The Home Depot in 2005 and has held various finance-related positions  **[0000354950-24-000062_hd-20240128.htm:108]** .                                                                   |
| William D. Bastek     | Executive Vice President – Merchandising             | March 2023          | William D. Bastek has been the Executive Vice President – Merchandising since March 2023. He began his career in 1989 at HD Supply, which was acquired by Home Depot in 1997  **[0000354950-24-000062_hd-20240128.htm:107]** **[0000354950-23-000059_hd-20230129.htm:103]** .                                                          |
| Ann-Marie Campbell    | Senior Executive Vice President                      | November 1, 2023    | Ann-Marie Campbell has been the Senior Executive Vice President since November 1, 2023. She started at The Home Depot in 1985 as a cashier and has held various roles of increasing responsibility  **[0000354950-24-000062_hd-20240128.htm:107]** **[0000354950-24-000108_hd-20240401.htm:71]** **[0000354950-23-000059_hd-20230129.htm:103]** .                                    |
| Matthew A. Carey      | Executive Vice President – Customer Experience       | April 2022          | Matthew A. Carey has been the Executive Vice President – Customer Experience since April 2022. He was previously the Executive Vice President and Chief Information Officer  **[0000354950-24-000062_hd-20240128.htm:107]** **[0000354950-23-000101_hd-20230330.htm:61]** .                                                            |
| John Deaton           | Executive Vice President – Supply Chain & Product Development | November 2021      | John Deaton has been the Executive Vice President – Supply Chain & Product Development since November 2021. He has held various senior roles in operations and supply chain since joining The Home Depot  **[0000354950-24-000062_hd-20240128.htm:107]** .                                    |
| Hector Padilla        | Executive Vice President – U.S. Stores and Operations | November 2023       | Hector Padilla has been the Executive Vice President – U.S. Stores and Operations since November 2023. He began his career with The Home Depot in 1994 as a store associate  **[0000354950-24-000062_hd-20240128.htm:108]** .                                                               |
| Teresa Wynn Roseborough | Executive Vice President, General Counsel, and Corporate Secretary | November 2011 | Teresa Wynn Roseborough has been the Executive Vice President, General Counsel, and Corporate Secretary since November 2011. She previously held legal positions at MetLife, Inc. and the U.S. Department of Justice  **[0000354950-24-000062_hd-20240128.htm:109]** **[0000354950-23-000059_hd-20230129.htm:105]** .                  |
| Fahim Siddiqui        | Executive Vice President and Chief Information Officer | April 2022         | Fahim Siddiqui has been the Executive Vice President and Chief Information Officer since April 2022. He previously held senior IT roles at Staples Inc.  **[0000354950-24-000062_hd-20240128.htm:109]** .                                                                                     |
| Timothy A. Hourigan   | Executive Vice President – Human Resources           | June 2017           | Timothy A. Hourigan has been the Executive Vice President – Human Resources since June 2017. He has held various human resources roles within the company since joining  **[0000354950-24-000062_hd-20240128.htm:108]** .                                                                    |

e56551c0953db67e7ef8d5eb82f60a4b5b343814515f653ea3ea92ecf51e3789

| Program Details         | Program 1          | Program 2          |
|-------------------------|--------------------|--------------------|
| Approval Date           | August 2022  **[0000354950-24-000240_hd-20241027.htm:20]**     | August 2023  **[0000354950-24-000240_hd-20241027.htm:20]**     |
| End Date/Duration       | Replaced by Program 2  **[0000354950-24-000240_hd-20241027.htm:20]**  | No expiration date  **[0000354950-24-000240_hd-20241027.htm:20]**  |
| Total additional amount | **$15.0 billion**  **[0000354950-24-000240_hd-20241027.htm:20]**  | **$15.0 billion**  **[0000354950-24-000240_hd-20241027.htm:20]**  |
| Remaining authorization amount | N/A (replaced) | Approximately **$11.7 billion**  **[0000354950-24-000240_hd-20241027.htm:20]** **[0000354950-24-000240_hd-20241027.htm:33]**  |
| Details                 | Replaced by August 2023 authorization  **[0000354950-24-000240_hd-20241027.htm:20]**  | Replaced August 2022 authorization  **[0000354950-24-000240_hd-20241027.htm:20]**  |

d263a0f4530ea5ac658e2c1c43a04017ee8706da83e937159ec330dd2de66d70

**Annual guidance for FY 2024:**
- **Total Sales Growth**: Approximately 4%  **[HD_3407827_6]**  (raised from 2.5%–3.5%  **[HD_3398503_6]** )
- **Comparable Sales**: Decline of approximately 2.5%  **[HD_3407827_6]**  (raised from a decline of 3%–4%  **[HD_3398503_6]** )
- **Gross Margin**: Approximately 33.5%  **[HD_3407827_7]**  (no change from prior guidance  **[HD_3398503_6]** )
- **Operating Margin**: Approximately 13.5%  **[HD_3407827_7]**  (lowered from 13.5%–13.6%  **[HD_3398503_6]** )
- **Adjusted Operating Margin**: Approximately 13.8%  **[HD_3407827_7]**  (lowered from 13.8%–13.9%  **[HD_3398503_6]** )
- **Effective Tax Rate**: Approximately 24%  **[HD_3407827_7]**  (no change from prior guidance  **[HD_3398503_6]** )
- **Net Interest Expense**: Approximately $2.1 billion  **[HD_3407827_7]**  (lowered from $2.2 billion  **[HD_3398503_6]** )
- **Diluted Earnings Per Share**: Decline of approximately 2%  **[HD_3407827_7]**  (raised from a decline of 2%–4%  **[HD_3398503_6]** )
- **Adjusted Diluted Earnings Per Share**: Decline of approximately 1%  **[HD_3407827_7]**  (raised from a decline of 1%–3%  **[HD_3398503_6]** )
- **New Stores**: Plan to open approximately 12 new stores  **[HD_3407827_7]**  (no change from prior guidance  **[HD_3398503_6]** )

6c37cbde92ba0c89b28fe737999fb35389a615e36797b1c398fc63491a5f0d38

| Name       | Start Date | End Date | Reason for Change |
|------------|------------|----------|-------------------|
| KPMG LLP   | 1979  **[0000354950-24-000062_hd-20240128.htm:65]**    | Present  | Current auditor   |

c703d8064e351d77b691dcab3fe9bb6f959edc38cdb1e6aace3001aa5a72211b

3ac1efe4985e793aa5dafd48e8a288a8926cc01aa56329f8afc64bfd071f01e1

- Total Revenue: $40,217 million (+7% YoY)  **[0000354950-24-000240_hd-20241027.htm:12]** **[0000354950-23-000240_hd-20231029.htm:13]**   
- Building Materials: $13,479 million (**-9% YoY**)  **[0000354950-24-000240_hd-20241027.htm:12]** **[0000354950-23-000240_hd-20231029.htm:13]**   
- Hardlines: $11,128 million (**+8% YoY**)  **[0000354950-24-000240_hd-20241027.htm:12]** **[0000354950-23-000240_hd-20231029.htm:13]**   
- Products: $38,692 million (+7% YoY)  **[0000354950-24-000240_hd-20241027.htm:13]** **[0000354950-23-000240_hd-20231029.htm:13]**   
- U.S. Revenue: $37,135 million (+7% YoY)  **[0000354950-24-000240_hd-20241027.htm:12]** **[0000354950-23-000240_hd-20231029.htm:13]**   

9ecd23d38fa5a60a4e1fd23ea3723a3539d1a9831ba7cf29ffb3f662a67ae73b

90522e8a8226c22741c49fa2e817abf2a409f3b75c5509e0301a469a3c0fec75

Number of new stores opened in the U.S. (count)

Total number of stores (count)

Number of stores in Canada and Mexico (count)

Inventory turnover ratio (times)

Sales per retail square foot (USD per square foot)

Return on invested capital (percentage)

Comparable sales percentage change (percentage)

Comparable customer transactions percentage change (percentage)

Comparable average ticket percentage change (percentage)

Customer transactions (millions)

Average ticket (USD)

Online sales as percentage of net sales (percentage)

e5e7a08fdb369513f2e99a587f90a0a0e89692fba119832dbe21fd153a52a3bf

e77bba7c554410517b3ae22b294eff9e76ca4c3661780892f7dffb8c8fc203a8

- **Strong underlying housing market fundamentals**: **Home price appreciation is up 45%**, and **home equity has increased by approximately 70%**, providing untapped potential for home improvement spending. **Home equity lines of credit (HELOCs) and cash-out refinances are at multi-year lows**, indicating significant untapped homeowner equity.  **[HD_3374018_20]**
- **Aging housing stock and favorable demographics**: Over **50% of homes are over 40 years old**, necessitating maintenance and improvements. Additionally, **millennials are becoming the largest home improvement customer segment**, entering prime household formation and homeownership ages, which is expected to drive demand.  **[HD_3374018_20]**
- **Stabilizing demand and strategic growth initiatives**: **Transactions and units have stabilized over the last three quarters**, suggesting a bottoming of demand. The company expects to **outperform the market** through its growth initiatives, including the **Pro ecosystem**, the **best interconnected shopping experience**, and the addition of **new stores**, positioning it well for future growth.  **[HD_3374018_18]** **[HD_3374018_16]** **[HD_3374018_22]**

fed49a726ffa039c9117c8a59f6d02a770ac9267d0f3131c68d8bf56d296d9ea

1. **Impact of SRS Acquisition on Margins**  
   **Q:** How does SRS affect gross and operating margins?  
   **A:** The acquisition of SRS impacted our second-quarter gross margin by about **35 basis points** and will reset our margin profile by about **45 basis points** annually due to their different product mix, which carries a lower gross margin rate.  **[HD_3398503_11]**  SRS also lowers our base operating margin profile by about **40 basis points** for the full year 2024.  **[HD_3398503_11]** 

2. **Consumer Hesitancy in Large Projects**  
   **Q:** What examples show increased consumer hesitancy?  
   **A:** We observed further pressure in larger projects, particularly in building materials and lumber tied to construction of larger projects.  **[HD_3398503_7]**  This change occurred as macroeconomic concerns grew, including political and geopolitical noise, rising unemployment, and inflation affecting disposable income.  **[HD_3398503_7]** 

3. **Impact of Mortgage Rates on Business**  
   **Q:** What mortgage rate level boosts Home Depot's sales?  
   **A:** As mortgage rates trend down towards **6%**, we expect increased housing activity and customer engagement, similar to the uptick seen when rates previously dipped below **6.5%**.  **[HD_3398503_10]**  However, broader economic concerns may cause some customers to pause.  **[HD_3398503_10]** 

4. **Pricing Environment and Inflation**  
   **Q:** Are product prices deflating or changing?  
   **A:** No, we're not seeing any broad step down in costs or retails.  **[HD_3398503_12]**  The cost environment is neutral, and we're not observing significant deflation or promotional pressure in non-commodity products.  **[HD_3398503_12]** 

5. **Plans for Promotions and Pricing**  
   **Q:** Will you invest more in price to gain market share?  
   **A:** We don't see the need to be more promotional.  **[HD_3398503_11]**  We're focused on driving innovation and creating value rather than increasing promotions, and we feel good about our position in the market.  **[HD_3398503_11]** 

6. **SRS Growth and Strategy**  
   **Q:** What's driving SRS's strong revenue growth?  
   **A:** SRS achieved high single-digit growth, split roughly equally between organic growth and acquisitions.  **[HD_3398503_14]**  They continue to be robust share-taking growers, employing a balanced strategy of comping existing branches, opening greenfields, and pursuing roll-up M&A.  **[HD_3398503_14]** 

7. **Share Repurchase Plan Timing**  
   **Q:** When will share buybacks resume?  
   **A:** We aim to reduce our debt-to-EBITDA ratio from **2.6x** to around **2.0x** before restarting share repurchases, likely in **2026**.  **[HD_3398503_19]** 

8. **Category Performance and Gaps**  
   **Q:** Which categories show widening performance gaps?  
   **A:** Despite pressure on financed projects, we saw strong performance in **vinyl plank flooring** with positive sales and unit comps, **water heaters**, **paint**, and power equipment.  **[HD_3398503_9]**  Larger ticket one-time purchase categories like **riders** also showed good engagement.  **[HD_3398503_9]** 

9. **Pro vs DIY Performance**  
   **Q:** How did Pro sales compare to DIY?  
   **A:** Pro sales outperformed DIY in the quarter.  **[HD_3398503_18]**  Investments in the Pro ecosystem, including expanded distribution and outside sales teams, led to positive growth in markets where we've invested.  **[HD_3398503_18]** 

10. **Comps Trend and Guidance**  
    **Q:** Why did comps slow from June to July?  
    **A:** The extreme heat in July shifted sales in weather-related categories like **ACs**, **fans**, and **watering products** to June, causing softer July comps.  **[HD_3398503_16]**  August comps started better than July and are consistent with expectations for a negative **3%** comp result for the year.  **[HD_3398503_16]** 

12a1aaf63753af9ee96df9c2e65b6c3f72bfe4123189478d113d5711289721a1

1. **Gross Margin Outlook**  
   **Q:** What's affecting gross margins and future trajectory?  
   **A:** Gross margin declined due to an **80 basis point** impact from the SRS acquisition mix.  **[HD_3407827_12]**  Excluding SRS, margins were up significantly, aided by benefits from shrink reduction.  **[HD_3407827_12]**  The annualized impact from SRS is about **70 basis points**, shifting our margin base.  **[HD_3407827_12]**  Long-term, we anticipate flat gross margins, reinvesting supply chain productivity while maintaining sharp value for customers.  **[HD_3407827_12]** 

2. **Housing Market and Interest Rates**  
   **Q:** How are interest rates affecting larger projects and outlook?  
   **A:** Higher rates are pressuring larger, debt-financed remodeling projects and existing home sales, which are at a 40-year low turnover rate of about **3%**.  **[HD_3407827_14]**  The uncertainty around rates and macroeconomic conditions delays homeowners starting big projects.  **[HD_3407827_14]**  Stability in rates, rather than significant drops, might restore housing activity and remodeling demand.  **[HD_3407827_18]** 

3. **Market Share Gains**  
   **Q:** Are you gaining market share in this environment?  
   **A:** Although hard to parse out, we believe we're taking share as our sales outperformed deeper negatives seen in home furnishing expenditures.  **[HD_3407827_13]**  We saw strong performance in seasonal categories, **paint**, and **building materials**, indicating share gains.  **[HD_3407827_13]** 

4. **Pro Segment Performance**  
   **Q:** How are the Pro capabilities impacting performance?  
   **A:** In the **17 markets** with enhanced Pro capabilities, we're seeing low single-digit share gains and outperformance.  **[HD_3407827_17]**  Investments in inventory, supply chain, delivery, and sales force have led to strong results, with Pro customers engaging more deeply with our ecosystem.  **[HD_3407827_17]** 

5. **Shrink Reduction**  
   **Q:** How significant is the opportunity from shrink reduction?  
   **A:** Our efforts are paying off, with multiple quarters of year-over-year benefits from shrink reduction.  **[HD_3407827_15]**  While the operating environment is getting harder, our investments and initiatives are leading to tangible results.  **[HD_3407827_15]** 

6. **SRS Integration**  
   **Q:** What's the progress on SRS cross-selling and volume?  
   **A:** SRS contributed **$2.9 billion** in Q3 sales, on track for **$6.4 billion** over roughly seven months.  **[HD_3407827_11]**  Cross-selling efforts are showing **triple-digit** comp growth, with their catalog now available to our customers and our products being quoted to their customer base.  **[HD_3407827_11]**  Early collaboration between sales teams is progressing well.  **[HD_3407827_11]** 

7. **Big-Ticket Sales Pressures**  
   **Q:** What's impacting big-ticket sales and their outlook?  
   **A:** Larger, discretionary projects are being deferred due to higher interest rates and macro uncertainties.  **[HD_3407827_14]**  Needs-based projects continue, but big-ticket sales are pressured until homeowners gain confidence to undertake larger remodeling.  **[HD_3407827_10]** **[HD_3407827_14]** 

8. **Impact of Hurricanes and Weather**  
   **Q:** How did hurricanes and weather affect performance?  
   **A:** Hurricane-related sales added about **55 basis points** in Q3, mainly in generators, cleanup, and lumber, skewed towards DIY customers.  **[HD_3407827_9]**  Exceptional weather drove customer engagement, but this benefit is hard to quantify, making us cautious about extrapolating Q3 results.  **[HD_3407827_17]** **[HD_3407827_20]**  Guidance reflects Q3 outperformance with some Q4 hurricane impact.  **[HD_3407827_9]** 

9. **Tariffs and Sourcing**  
   **Q:** What's your view on potential tariff impacts?  
   **A:** Any new tariffs would have an industry-wide impact, but we source the majority of our goods in North America and have experience managing through previous tariff situations.  **[HD_3407827_19]**  We're focused on diversifying sourcing and confident in our ability to navigate future trade policies.  **[HD_3407827_19]** 

10. **Order Management Rollout**  
    **Q:** What's the timeline for order management system rollout?  
    **A:** We plan to roll out the order management system by the end of **2025**.  **[HD_3407827_23]**  Key elements like inventory reservation are already being implemented, offering significant benefits to how pros manage larger projects.  **[HD_3407827_23]** 

b7c89d9fde8c72293302c2cf0f71d8490a2b4519175cb9dcfe1072e830ac6d50

| Year  | Amount Due (in millions) | Debt Type                     | Interest Rate | % of Total Debt |
|-------|--------------------------|-------------------------------|---------------|-----------------|
| 2025  | $600                     | Floating rate senior notes    | Floating Rate | 1.1% = (600M / 54,578M) * 100 **[0000354950-24-000240_hd-20241027.htm:6]** **[0000354950-24-000240_hd-20241027.htm:17]** |
| 2025  | $900                     | 5.100% senior notes           | 5.100%        | 1.6% = (900M / 54,578M) * 100 **[0000354950-24-000240_hd-20241027.htm:6]** **[0000354950-24-000240_hd-20241027.htm:17]** |
| 2026  | $1,500                   | 5.150% senior notes           | 5.150%        | 2.7% = (1,500M / 54,578M) * 100 **[0000354950-24-000240_hd-20241027.htm:6]** **[0000354950-24-000240_hd-20241027.htm:17]** |
| 2027  | $1,000                   | 4.875% senior notes           | 4.875%        | 1.8% = (1,000M / 54,578M) * 100 **[0000354950-24-000240_hd-20241027.htm:6]** **[0000354950-24-000240_hd-20241027.htm:17]** |
| 2029  | $1,250                   | 4.750% senior notes           | 4.750%        | 2.3% = (1,250M / 54,578M) * 100 **[0000354950-24-000240_hd-20241027.htm:6]** **[0000354950-24-000240_hd-20241027.htm:17]** |
| 2031  | $1,000                   | 4.850% senior notes           | 4.850%        | 1.8% = (1,000M / 54,578M) * 100 **[0000354950-24-000240_hd-20241027.htm:6]** **[0000354950-24-000240_hd-20241027.htm:17]** |
| 2034  | $1,750                   | 4.950% senior notes           | 4.950%        | 3.2% = (1,750M / 54,578M) * 100 **[0000354950-24-000240_hd-20241027.htm:6]** **[0000354950-24-000240_hd-20241027.htm:17]** |
| 2054  | $1,500                   | 5.300% senior notes           | 5.300%        | 2.7% = (1,500M / 54,578M) * 100 **[0000354950-24-000240_hd-20241027.htm:6]** **[0000354950-24-000240_hd-20241027.htm:17]** |
| 2064  | $500                     | 5.400% senior notes           | 5.400%        | 0.9% = (500M / 54,578M) * 100 **[0000354950-24-000240_hd-20241027.htm:6]** **[0000354950-24-000240_hd-20241027.htm:17]** |

efadff5c3a1e096804c5c3dda35989364a0c27cf4f43009f4e79048d683ca082

- Home Depot is gaining **market share** in key categories such as **seasonal products, paint, and building materials**, demonstrating resilience despite macroeconomic uncertainties.  **[HD_3407827_13]**
- The **Pro segment** is **outpacing DIY customers**, with strong performance from Pros engaging with the **Pro ecosystem** and dedicated salespersons, indicating successful initiatives to capture higher-value customers.  **[HD_3407827_4]** **[HD_3407827_11]**
- The acquisition of **SRS** is significantly boosting revenue, with **$2.9 billion** contributed in the third quarter and on track for **$6.4 billion** in sales over approximately seven months, and early cross-selling opportunities are showing positive results.  **[HD_3407827_17]** **[HD_3407827_22]**

52be74fb54046bdd31ebde0e1a2174d5dd52a9e42652537b366de28c091087b4

1. **Comp Guidance and Macro Outlook**  
   **Q:** What's driving your negative 1% comp guidance?  
   **A:** We expect macro pressures to lead to low single-digit negative growth in home improvement demand, but we plan to outperform the market, resulting in a **negative 1% comp outlook**.  **[HD_3374018_9]** **[HD_3374018_10]** 

2. **Housing Market Impact**  
   **Q:** How are housing trends affecting your business?  
   **A:** Housing turnover has dropped sharply, creating a headwind, but home prices have appreciated over **46% since 2019**, and we're essentially **neutral on housing short term**.  **[HD_3374018_10]** 

3. **Gross Margin Expectations**  
   **Q:** Why did gross margin decline in Q4, and what's the outlook for 2024?  
   **A:** Gross margin was in line with our expectations; we saw pressure from pricing actions ahead of cost decreases, but as costs settle, we expect **gross margin expansion in 2024**.  **[HD_3374018_15]** 

4. **Operating Margin Sensitivity**  
   **Q:** How sensitive are operating margins to changes in comp sales?  
   **A:** With no management intervention, the natural rule is about **10 basis points** of leverage or deleverage per point of comp up or down.  **[HD_3374018_19]** **[HD_3374018_21]** 

5. **Pro Segment Growth**  
   **Q:** How does your complex Pro build-out contribute to growth?  
   **A:** Improvements are embedded in our sales guidance; managed account customers engaging with our ecosystem were the **highest performing** segment, and we expect this to continue.  **[HD_3374018_12]** **[HD_3374018_16]** 

6. **Cost Savings Initiatives**  
   **Q:** What are you doing to manage costs?  
   **A:** We reduced fixed costs towards the end of '23, achieving **$500 million in cost savings** implied in our guidance.  **[HD_3374018_21]** **[HD_3374018_23]** 

7. **Consumer Demand Trends**  
   **Q:** What did you observe in consumer demand over the holidays?  
   **A:** We saw strong engagement in categories like holiday décor, gifts, and appliances; the consumer is healthy and engaged in **smaller projects**.  **[HD_3374018_14]** 

8. **Inflation and Pricing Environment**  
   **Q:** How is the disinflationary environment affecting you?  
   **A:** Pricing has settled; we haven't seen any difference in promotional activity compared to pre-pandemic levels; we're in a **normalized environment**.  **[HD_3374018_13]** 

9. **Conditions for Sales Recovery**  
   **Q:** What conditions are needed for comps to turn positive?  
   **A:** We expect the impact of low housing turnover to cycle through, and with the macros lining up, we're optimistic about returning to growth as we continue to build capabilities and gain share.  **[HD_3374018_22]** 

10. **Trade Credit for Pros**  
    **Q:** Can you expand on your trade credit pilot for Pros?  
    **A:** Trade credit is a necessary capability we're building to service larger Pro projects; we're in early days, piloting with plans to expand over the next few quarters.  **[HD_3374018_24]** 

03fe6d55fd3a12ce3e55009f8ce57f95f43d0426f32766ece94fee21ddb73bef

- **Increased pressure on larger projects due to higher interest rates and macroeconomic uncertainty, leading to decreased sales in categories tied to big projects such as building materials and lumber**.  **[HD_3398503_7]**
- **Housing turnover is down approximately 40%, approaching 40-year lows, impacting customers' interest in financing larger projects and leading to deferrals**.  **[HD_3398503_7]**
- **Signs of general weakness and softening consumer demand, with comparable store sales decreasing (-3.7% in May, -0.9% in June, and -4.9% in July), leading to a cautious sales outlook and negative comp sales guidance (-3% to -4% for fiscal 2024)**.  **[HD_3398503_16]**

3de057464c37b7366d8089cd4926c4d7fbd00d8a5d09441f0b360949efce40f4

- Both **Pro and DIY sales were negative for the quarter**, reflecting a broad-based decline in demand.  **[HD_3388983_11]**
- There is continued **softness in larger discretionary projects**, particularly those where customers typically use financing, such as kitchen and bath remodels.  **[HD_3388983_3]**
- **Big ticket transactions over $1,000 were down 6.5% compared to the first quarter of last year**, indicating a slowdown in high-value purchases.  **[HD_3388983_3]**

445061453749b58e24c2a9f8bd4d624a07cf9f098e72152699057f4af2688589

1. **Guidance Amid Macro Pressures**  
   **Q:** Is any change in macro needed to achieve your guidance?  
   **A:** Management reaffirmed their guidance, stating that no change in the macro environment is needed to achieve their targets. They acknowledged the delayed start to spring but emphasized that they manage the business in halves and expect spring to come eventually.  **[HD_3388983_21]** 

2. **SRS Acquisition and Complex Pro Efforts**  
   **Q:** Does acquiring SRS indicate challenges in complex pro efforts?  
   **A:** Management believes that while building wholesale distribution capabilities is challenging, they are succeeding and remain optimistic about their organic efforts. They view the **SRS acquisition as a separate opportunity**, opening up **$50 billion** in new addressable markets across roofing, specialty trade, pool, and landscape verticals where SRS holds strong positions.  **[HD_3388983_16]** **[HD_3388983_13]** 

3. **Transaction Trends and Market Share**  
   **Q:** Are improving transactions due to industry or market share gains?  
   **A:** The company believes they are **taking market share**, citing third-party reporting. Transaction trends are improving, and units per basket are up. They attribute this to lapping COVID pull-forward effects and managing the impact of decreased housing turnover on transactions.  **[HD_3388983_10]** 

4. **Weakness in Discretionary Projects**  
   **Q:** Any signs of stabilization in big-ticket discretionary projects?  
   **A:** Discretionary large projects, especially in **kitchen and bath**, remain the single biggest pressure point. Management observed some trading down in these categories due to decreased housing turnover and higher interest rates impacting financed projects. They expect this pressure to pass over time as these dynamics stabilize.  **[HD_3388983_23]** **[HD_3388983_8]** 

5. **Average Unit Retail Pressure**  
   **Q:** What drives the expected second-half sales improvement?  
   **A:** The primary driver is the abatement of pressure from **Average Unit Retail (AUR)**. The company experienced about a **2%** year-over-year pressure on AUR in Q1, which is expected to halve to **1%** in Q2 and diminish further by year-end. This pressure is due to year-over-year comparisons rather than current pricing changes.  **[HD_3388983_18]** **[HD_3388983_19]** 

6. **Shrink Impact on Gross Margin**  
   **Q:** How is shrink affecting gross margins?  
   **A:** Shrink, driven by organized retail crime, remains a pressure on gross margins. Management noted that despite the external environment not improving, their teams are succeeding in mitigating its impact through significant investments, yielding returns both financially and in associate and customer safety.  **[HD_3388983_18]** 

7. **Spending Patterns Across Income Cohorts**  
   **Q:** Are there changes in spending between income groups?  
   **A:** Spending pressure is more about **project size** than income cohorts. Larger, debt-financed projects are being deferred due to interest rate concerns, affecting customers across income levels. Smaller item purchases are performing better in comparison.  **[HD_3388983_17]** **[HD_3388983_9]** 

8. **Promotional Environment and Margins**  
   **Q:** Has the promotional environment changed, impacting margins?  
   **A:** The promotional environment remains **rational** and similar to pre-COVID levels. The company runs events to drive excitement and customer traffic, not as a response to increased promotional pressure. Categories like appliances have normalized to pre-COVID promotional activity.  **[HD_3388983_20]** 

9. **Pro Segment Performance**  
   **Q:** How are pro customers performing compared to DIY?  
   **A:** Both **pro and DIY segments** were negative for the quarter at similar rates. However, **larger pros**, especially those engaging with the company's ecosystem, are outperforming. In markets where they've expanded capabilities like supply chain and sales teams, they've seen **positive comps**.  **[HD_3388983_11]** **[HD_3388983_24]** 

10. **Spring Season and Weather Impact**  
    **Q:** How is business tracking with the delayed spring?  
    **A:** Where weather has been favorable, the company has seen great customer engagement and strength in outdoor projects. The first weeks of May showed similar trends, and management remains optimistic as their biggest selling weeks lie ahead, hoping for drier weather and sunnier days.  **[HD_3388983_7]** **[HD_3388983_17]** 

57ef44def36e4b422418dafcfabfee22f5623f7097c75108222ef1e3b8a3ee64

- **Gross margins are under pressure** due to the acquisition of SRS, which impacted gross margin by 80 basis points in the quarter and is expected to have a 70 basis point annualized impact, potentially affecting profitability.  **[HD_3407827_12]**
- **Shrink remains a significant challenge**, with the operating environment getting harder, indicating ongoing pressures on profitability despite investments to combat theft and loss.  **[HD_3407827_15]**
- **Weakness in big-ticket transactions**, with transactions over $1,000 down 6.8% compared to last year, reflects softer engagement in larger discretionary projects, possibly due to higher interest rates and macroeconomic uncertainty, which could impact future sales growth.  **[HD_3407827_4]**

bdd77dac0d31369cbd276f2e6d059ea00cf30fe8cfcbeb2e2a59f41a39903ced

- **Home Depot is seeing positive comparable sales in markets where they have invested in pro capabilities**, particularly in serving complex pro customers. This indicates that their strategy to grow pro wallet share is yielding results, and as they expand these capabilities to more markets, they expect continued outperformance.  **[HD_3388983_24]** ,  **[HD_3388983_14]** ,  **[HD_3388983_11]**
- **The company reaffirmed its full-year guidance for fiscal 2024, despite a slow start to spring and macroeconomic challenges**, demonstrating confidence in their operational execution and ability to meet customer needs in any environment. Management noted that the delayed spring is not expected to impact annual results or guidance.  **[HD_3388983_21]** ,  **[HD_3388983_15]**
- **Strong operational performance, including reducing inventory by approximately $3 billion while increasing in-stock levels and on-shelf availability**, highlights Home Depot's operational efficiency and effective supply chain management. This positions the company well for future growth and demonstrates their focus on controlling what they can control.  **[HD_3388983_15]** ,  **[HD_3388983_18]**

58f38bf645cdf32d0f9c8cdd3528eac9d2ecf487641b95b9307e4819df7e4e6b

- **Home Depot's acquisition of SRS is expected to accelerate sales and earnings growth**, with SRS delivering **high single-digit percentage sales growth** driven by both organic initiatives and acquisitions, enhancing Home Depot's growth potential.  **[HD_3398503_14]** **[HD_3398503_11]**
- **The company's diversified business model, including HD Supply and SRS, is showing strong performance**, with HD Supply posting **positive sales growth** even in a challenging environment, contributing to Home Depot's overall strength.  **[HD_3398503_8]**
- **Investments in the Pro customer ecosystem are yielding positive results**, with Pro customers outperforming DIY, and expansion into **17 markets** driving positive growth and increasing share of wallet with Pro customers.  **[HD_3398503_18]**

f91597c76577968b7007dc9f590583e8797cc71023c4f3449076cd5f16b4e15e

- **Home Depot is facing ongoing macroeconomic pressures, with both ticket and transactions remaining negative for the quarter, reflecting softened demand in the home improvement market.**  **[HD_3374018_18]**
- **The company anticipates macro headwinds leading to low single-digit negative growth in home improvement demand, with customers deferring large projects due to higher interest rates and decelerating personal consumption expenditure (PCE). This contributes to their negative 1% comp sales outlook for fiscal 2024.**  **[HD_3374018_10]** ,  **[HD_3374018_9]**
- **Operating cost inflation remains higher than sales growth, resulting in deleverage and pressure on operating margins. The company expects an impact on operating margins due to sales deleverage and incentive compensation.**  **[HD_3374018_16]** ,  **[HD_3374018_19]**

280603607125bcdb1d70f03cb06ba4b973e9b33d3f30b1ea97574de3fac6a810

Home Depot Inc (HD)

Financials