Home Depot with Moderate Growth and Cautious Outlook for 2025

Home Depot (HD.US) reported its second-quarter 2025 results, which came in line with market expectations, though they offered little in the way of positive surprises. The company posted revenue of $43.18 billion, and earnings per share (EPS) came in at $4.68, slightly below analyst forecasts. The stock is trading slightly lower today, which may reflect investor caution amid economic slowdown concerns and limited sales growth.

Home Depot Inc. is one of the world’s largest retail chains specializing in the sale of building materials, tools, home improvement products, and renovation services. The company primarily operates in the U.S. market, serving both individual customers and professional contractors. With a broad product offering and an extensive store network, Home Depot is a leader in the home improvement sector.

Financial results for Q2 2025

• Revenue (GAAP): $43.18 billion, up 0.6% year-over-year (vs. $42.91 billion in Q2 2024)

• Gross profit (adjusted): $14.4 billion, with a stable gross margin of approximately 33%

• EBITDA (adjusted): $7.5 billion

• Net income (adjusted): $4.56 billion, a slight year-over-year decline, with a net margin of about 10%

• Earnings per share (EPS, adjusted): $4.68, slightly below the market forecast of $4.69, representing a 0.2% decline from Q2 2024

• U.S. comparable sales: Up 1.4% YoY, indicating steady demand in the retail segment

• Operating margin: 13.0%, in line with analyst expectations

• Operating cash flow: $5.4 billion, down compared to the previous year

• Free cash flow: $4.7 billion, also down year-over-year

• Capital expenditures: $720 million, slightly lower than the previous year

Chart view (D1 interval)

Source: xStation5

Outlook 

Home Depot reaffirmed its full-year 2025 guidance, projecting revenue growth of approximately 2.8%, alongside an expected decline in EPS of around 3%. While stable revenue growth and sustained operating margins reflect a relatively strong financial position and effective cost control, the moderate pace of comparable sales growth in the U.S. may signal a potential slowdown ahead.

The decline in cash flows is a point of concern and warrants close monitoring in the upcoming quarters. However, capital expenditures remain under control, suggesting a cautious investment approach in the face of ongoing market uncertainty.

In summary, while Home Depot maintains a strong market position, macroeconomic headwinds and weakening sales momentum may limit the pace of future earnings growth.