{"id":135524,"date":"2025-05-22T01:21:04","date_gmt":"2025-05-22T01:21:04","guid":{"rendered":"https:\/\/teknomers.com\/en\/home-depot-misses-earnings-but-wont-raise-prices-amid-trumps-tariffs\/"},"modified":"2025-05-22T01:21:04","modified_gmt":"2025-05-22T01:21:04","slug":"home-depot-misses-earnings-but-wont-raise-prices-amid-trumps-tariffs","status":"publish","type":"post","link":"https:\/\/teknomers.com\/en\/home-depot-misses-earnings-but-wont-raise-prices-amid-trumps-tariffs\/","title":{"rendered":"Home Depot misses earnings but won’t raise prices amid Trump’s tariffs."},"content":{"rendered":"
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**Home Depot Earnings Report: Mixed Results Amid Housing Market Challenges**<\/h2>\n

Home Depot (HD) investors looking for a **turnaround** in the housing market might find themselves waiting longer than anticipated. The home improvement giant recently reported **mixed results** for its quarterly earnings, revealing how external factors like tariffs have led consumers to rethink their **home renovation** projects. <\/p>\n

**Quarterly Performance Highlights**<\/h2>\n

On Tuesday, Home Depot disclosed a year-over-year revenue increase of **9.4%**, amounting to **$39.86 billion**, surpassing Wall Street’s expectations of **$39.29 billion**. However, the company’s **net earnings per share** dropped by **3%** to **$3.56**, falling short of the forecasted **$3.59**. Notably, **same-store sales** fell by **0.3%**, diverging from the anticipated **0.2% decline**. This marks a **reversal** in momentum as the same-store sales had previously shown positive growth after eight consecutive quarters of decline. Additionally, foreign exchange rates adversely affected performance by approximately **70 basis points**. <\/p>\n

**CEO’s Insights on Demand Trends**<\/h2>\n

In an earnings call, CEO Ted Decker stated that the results aligned with their internal expectations. He noted a noticeable decline in demand for larger, **discretionary projects**, while smaller projects saw an uptick in shopper engagement. Interestingly, sales to professional customers have outperformed those coming from DIY clients, indicating a shift in market dynamics. <\/p>\n

Despite the **0.6% drop** in shares on the announcement day, analysts like TD Cowen\u2019s Max Rakhlenko pointed out that investors were somewhat “encouraged” by the fact that the decline in same-store sales was \u201cbetter than feared.\u201d <\/p>\n

**Market Context and Broader Trends**<\/h2>\n

Before the latest earnings report, Home Depot\u2019s stock had already seen a **2.5% decline** this year. In contrast, rival Lowe’s (LOW) reported nearly a **5% decrease**, whereas the S&P 500 (^GSPC) has experienced a modest **1% gain**. Analysts, like Telsey Advisory Group’s Joe Feldman, predict that it may take several quarters for growth to stabilize, particularly as macroeconomic pressures persist and uncertainties around **new tariff policies** loom. <\/p>\n

The concern surrounding tariffs remains a significant issue; the U.S. temporarily reduced tariffs on Chinese imports from **145% to 30%**, while reciprocal tariffs have been suspended for a universal **10% duty**. Nonetheless, the overall rates remain historically high, negatively influencing **consumer sentiment** across the board. <\/p>\n

**Strategic Adjustments and Future Plans**<\/h2>\n

A Home Depot spokesperson recently communicated to Yahoo Finance that the company plans to work closely with suppliers while diversifying its sourcing channels to mitigate the impact of rising prices. The chain aims to ensure that no single country will account for more than **10% of its purchases** in the coming year. In line with this, EVP of merchandising, Bill Bastek, indicated during the earnings call that items susceptible to tariffs will be removed from inventory. <\/p>\n

Rakhlenko pointed out that Home Depot is better positioned to manage tariff impacts than Lowe\u2019s, given that **50% of its customer base comprises professionals** compared to Lowe\u2019s **20%** exposure to Chinese goods. This strategic advantage could help Home Depot navigate the current turbulent environment more effectively than its competitors. <\/p>\n

**Housing Market Influences**<\/h2>\n

The sluggish state of the housing market poses another challenge for Home Depot. In May, **homebuilder confidence** continued to deteriorate, with expectations for future sales and traffic from potential buyers hitting an **18-month low**. Adding to this context, **Treasury yields** have risen after Moody’s downgraded the U.S. government’s long-term credit rating from **AAA to AA1**, likely leading to increased financing costs for home improvement projects and impacting home-buying activities. <\/p>\n

**Guidance and Consumer Outlook**<\/h2>\n

Home Depot has reiterated its guidance, expecting net sales growth of **2.8%** and a **1%** increase in same-store sales for the entire fiscal year. Although no specific guidance for Q2 has been provided, Bastek characterized the upcoming quarter as the company’s **”Super Bowl” season**, expressing confidence in their inventory management and availability. <\/p>\n

Feldman posited that Home Depot \u201cshould remain a long-term winner in retail,\u201d citing its **best-in-class execution**, **digital capabilities**, and increased home maintenance and repair activities due to evolving work-from-home arrangements. He identified Home Depot’s professional customer base as holding a \u201csignificant opportunity,\u201d with an addressable market estimated at around **$250 billion** following its recent acquisition of **SRS Distribution**. <\/p>\n

Decker emphasized that Home Depot’s customers represent one of the strongest demographics in the economy, with an average income of **$110,000** and **80%** owning their homes. With stock markets recovering and strong job and wage growth, he expressed optimism about the company’s performance moving forward. <\/p>\n<\/div>\n

Finance and Crypto News-7<\/a><\/p>\n

Tm-En-7<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

**Home Depot Earnings Report: Mixed Results Amid Housing Market Challenges** Home Depot (HD) investors looking for a **turnaround** in the housing market might find themselves waiting longer than anticipated. The home improvement giant recently reported **mixed results** for its quarterly earnings, revealing how external factors like tariffs have led consumers to rethink their **home renovation** […]<\/p>\n","protected":false},"author":1,"featured_media":108984,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23832],"tags":[],"class_list":["post-135524","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"_links":{"self":[{"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/posts\/135524","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/comments?post=135524"}],"version-history":[{"count":0,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/posts\/135524\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/media\/108984"}],"wp:attachment":[{"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/media?parent=135524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/categories?post=135524"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/tags?post=135524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}