Dwelling Depot Comps Slide in 1Q as Professional Narrowly Outperforms DIY

The Dwelling Depot reported its 2025 first quarter fiscal outcomes on Might 20 for its February-April quarter, exhibiting a wholesome year-over-year enhance in general gross sales, whereas comparable figures noticed a modest decline.

The corporate posted whole 1Q gross sales of $39.9 billion, up 9.4% year-over-year, whereas comparable gross sales fell 0.3%. Within the U.S., comparable gross sales elevated 0.2%.

By month, comparable year-over-year gross sales had been -3.3% in February, +1.3% in March and +1.8% in April.

1Q gross margin was 33.8%, down 35 foundation factors year-over-year, reflecting a change in product combine on account of the corporate’s $18 billion acquisition of SRS Distribution accomplished in June of 2024.

Web revenue for 1Q was $3.4 billion, down from the $3.6 billion of a yr earlier.

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The corporate reaffirmed its 2025 steerage that forecasts whole 2025 gross sales progress of about 2.8% and comparable gross sales progress of 1.0%. The Dwelling Depot expects full-year gross margin of about 33.4% and working margin of 13.0%.

The corporate additionally expects to have opened 13 new shops by the top of 2025. HD’s retail retailer depend on the finish of 1Q was 2,350, with 2,028 of these within the U.S.

Different notes from Dwelling Depot’s 1Q:

• Inflation from core commodity classes optimistic impacted common ticket by roughly 30 foundation factors, pushed by inflation in lumber and copper
• International trade charges negatively impacted whole firm comps by roughly 70 bps
• Comp common ticket was primarily flat year-over-year and comp transactions had been down 0.5%
• Large ticket comp transactions (>$1,000) had been up 0.3% year-over-year
• 16 merchandising departments posted optimistic comps throughout 1Q, together with home equipment, plumbing, indoor backyard, electrical, out of doors backyard and constructing supplies
• Comp gross sales leveraging digital platforms elevated roughly 8% year-over-year

DIY vs. Professional Comps

The corporate mentioned it was happy with the 1Q efficiency it noticed in constructing supplies, lumber and {hardware}, however continued to see softer engagement in bigger discretionary initiatives the place clients usually use financing to fund the undertaking, reminiscent of kitchen and loo remodels.

Dwelling Depot didn’t share particular figures on Professional and DIY efficiency, however mentioned that whereas general comp gross sales had been down 0.3%, Professional comp gross sales had been optimistic and outpaced DIY.

“We noticed energy throughout many Professional heavy classes like gypsum, decking, concrete and siding,” Merchandising lead Billy Bastik mentioned on the decision.

SRS Distribution Efficiency Replace

Commenting on the efficiency of SRS Distribution, the corporate mentioned that SRS exceeded expectations throughout 1Q, attaining $2.6 billion in gross sales.

“If you happen to simply take a look at their progress by the three verticals they function in, we exceeded our expectation,” CEO Ted Decker mentioned. “We consider they’re taking share in every of these three verticals. So, couldn’t be happier with SRS. They’re working additional a playbook of natural progress made up of comp department progress and opening new branches in addition to tuck-in acquisitions, and that’s energetic in all three verticals.”

Decker added that SRS helps Dwelling Depot’s Professional ecosystem with a present concentrate on its commerce credit score program, which now has over 90,000 accounts.

Chief Monetary Officer Richard McVale added that the corporate expects SRS to fulfill HD’s expectations of mid-single digit progress for the yr.

MDM Podcast: A Dwelling Depot-SRS Megadeal Breakdown

Holding Costs Regular Amid Tariffs

In an earnings name with analysts, the corporate mentioned it doesn’t plan to enact large-scale costs will increase within the wake of President Trump’s tariffs coverage, although sure particular person merchandise might even see a value enhance and others merchandise could also be faraway from cabinets if further import prices make them not price it.

“We don’t see broad-based value will increase for our clients in any respect going ahead,” HD Chief Merchandising Officer Billy Bastek mentioned in the course of the name. “There’s objects that we now have that would probably be impacted from a tariff that, candidly, we received’t have going ahead. There’ll be ome issues that don’t make sense that simply find yourself going away.”

Bastek additionally emphasised the corporate’s sourcing energy and diversification, noting that greater than half of HD’s purchases are sourced domestically within the U.S. and that the corporate anticipates no single nation will signify 10% of its purchases a yr from now.