Robert Besser
22 May 2025, 20:48 GMT+10
ATLANTA, Georgia: Home Depot plans to hold prices steady despite the added strain of tariffs, the company said, but warned that some products may become unavailable as a result.
Speaking on a post-earnings call, Billy Bastek, executive vice president of merchandising, said the home improvement retailer is "committed to maintaining pricing across our portfolio." However, he acknowledged that this approach could result in certain items being removed from shelves.
"There are items that we have that could potentially be impacted from a tariff that, candidly, we won't have going forward if it doesn't make sense inside the line structure," Bastek said, without naming specific products.
Home Depot's comments come as many U.S. consumer-facing companies, including Walmart, cite high import tariffs as a pressure point on prices and product availability. While Walmart warned of potential price hikes last week, Home Depot is instead choosing to absorb some of the impact or adjust its product mix.
The Atlanta-based retailer is less reliant on imports from China than some of its peers. CEO Ted Decker noted that the company now sources less than half its goods from outside North America and that, within a year, no single foreign country will account for more than 10 percent of purchases.
For the quarter ended May 4, Home Depot posted net sales of US$39.86 billion, beating analyst expectations of $39.31 billion, according to LSEG. Adjusted earnings per share came in at $3.56, narrowly missing the $3.60 forecast.
Operating margin slipped to 12.9 percent from 13.9 percent a year ago, reflecting higher costs. If Home Depot continues to shield consumers from tariff-related price increases, it may take a hit to margins, said Sheraz Mian of Zacks Investment Research.
Home Depot's key spring season—described by Bastek as the company's "Super Bowl"—was impacted by weak February sales due to poor weather conditions. Comparable sales for the quarter declined 0.3 percent, slightly more than the 0.15 percent drop analysts had expected.
While smaller home maintenance spending has remained solid, CEO Decker said larger renovation projects are still being delayed as consumers remain cautious. "There's still enough macro uncertainty" to cause hesitation, he said, despite low unemployment, declining inflation, and record home equity levels.
The company reiterated its forecast for full-year sales growth of 2.8 percent, with a projected decline of two percent in adjusted earnings per share.
Shares of Home Depot fell 0.5 percent on May 20.
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