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FY2025 Q3
Softening
Home Depot, Inc. (The) earnings call
Buzzberg read
Home Depot revised fiscal 2025 guidance lower on softer demand and no storms
Home Depot reported Q3 FY2025 sales of $41.4B (+2.8% YoY), with comps up 0.2%, missing expectations due to a lack of storm-related demand. The company lowered its full-year EPS guidance, citing ongoing consumer uncertainty and housing pressure, while highlighting continued market share gains, particularly in the pro segment through SRS and GMS. Management maintained a cautious outlook for Q4, with a more detailed strategy update expected at its December investor conference. Q3 comps were +0.2% overall, but underlying demand was ~1% and consistent with Q2, with the gap driven by an absence of hurricane/storm activity vs. last year.
Buzzberg read Home Depot revised fiscal 2025 guidance lower on softer demand and no storms Home Depot reported Q3 FY2025 sales of $41.4B (+2.8% YoY), with comps up 0.2%, missing expectations due to a lack of storm-related demand. The company lowered its full-year EPS guidance, citing ongoing consumer uncertainty and housing pressure, while highlighting continued market share gains, particularly in the pro segment through SRS and GMS. Management maintained a cautious outlook for Q4, with a more detailed strategy update expected at its December investor conference. Q3 comps were +0.2% overall, but underlying demand was ~1% and consistent with Q2, with the gap driven by an absence of hurricane/storm activity vs. last year. Read full analysisCollapse analysis
Home Depot reported Q3 FY2025 sales of $41.4B (+2.8% YoY), with comps up 0.2%, missing expectations due to a lack of storm-related demand. The company lowered its full-year EPS guidance, citing ongoing consumer uncertainty and housing pressure, while highlighting continued market share gains, particularly in the pro segment through SRS and GMS. Management maintained a cautious outlook for Q4, with a more detailed strategy update expected at its December investor conference. Q3 comps were +0.2% overall, but underlying demand was ~1% and consistent with Q2, with the gap driven by an absence of hurricane/storm activity vs. last year.
- The company updated FY2025 guidance: comps slightly positive, operating margin ~12.6%, adjusted EPS down ~5% YoY, reflecting softer demand and GMS-related dilution.
- SRS comped flat despite a mid-teens decline in industry roofing shipments, indicating significant market share gains; GMS acquisition remains on track to contribute ~$2B in sales.
- Pro and DIY comps were positive and relatively in line; pro-heavy categories like gypsum, insulation, siding, and plumbing saw strength.
Revenue$41.352BReported
EPS$3.74Reported
Gross margin33.41%Reported
Operating margin12.94%Reported
6 grounded callouts
What matters now
The highest-signal changes from the call.
Demand
Underlying demand stable around 1% excluding storm impacts
Demand
Monthly comps decelerated through Q3; October turned negative
Show 3 more callouts
AI
AI-powered blueprint tool aims to simplify pro project planning
M&A
GMS acquisition expands SRS into adjacent building materials
Demand
Pro backlogs for larger projects beginning to soften
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| Revenue | $41.352B | Reported |
| EPS | $3.74 | Reported |
| Gross margin | 33.41% | Reported |
| Operating margin | 12.94% | Reported |
| Free cash flow | $3.112B | Reported |
| Capex | $0.898B | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Capex | FY2025 | 2.5% | 2.5% | Maintained |
| Gross margin | FY2025 | 33.2% | 33.2% | Maintained |
| Operating margin | FY2025 | 12.6% | 12.6% | Maintained |
| Operating marginADJUSTED | FY2025 | 13% | 13% | Maintained |
| Revenue | FY2025 | $154B | $154B | Maintained |
AI, capex & demand read
Management read
Cautious
Management tempered the outlook by citing no storm tailwinds, persistent housing pressure, and consumer uncertainty, while still stressing market-share gains and controlled execution.
Management AI read
Management highlighted AI-powered Blueprint Takeoffs for pros, which automates material estimates and project planning, differentiating its pro ecosystem. No AI monetization or adoption metrics were provided.
Investment and capacity
Management reaffirmed fiscal 2025 capex of approximately 2.5% of sales, with $900 million invested in Q3, funding supply chain, faster delivery, and strategic initiatives; no raise or cut was indicated.
all 7 named companies below
Companiesreturns since call
Suppliers
Suppliers
Billy Bastik
LG appliances are a key part of Home Depot's Black Friday promotions, potentially driving sales volume.
Evidence
“And in appliances for Black Friday, we have exciting offers on LG, Samsung, Bosch, Whirlpool, GE, and Frigidaire.”
Supply chain
Supply chain
Richard McVail
Home Depot's online sales grew ~11% in Q3, significantly outpacing total sales growth of 2.8%, driven by faster delivery speeds from its DFC network. — The accelerating shift to online and the success of the DFC network could intensify competition with other online retailers in the home improvement space.
Evidence
“Turning to total company online comp sales, sales leveraging our digital platforms increased approximately 11% compared to the third quarter of last year.”
Supply chain
Richard McVail
SRS, which is heavily exposed to the roofing market, comped flat in Q3 while industry roofing shipments were down mid-teens, indicating substantial market share gains. — SRS's resilience in a downturn highlights its growing competitive position, potentially pressuring roofing material suppliers and smaller distributors.
Evidence
“We know that shipments are down double digits from the absence of storm activity this year. SRS actually comped flat for Q3, and so we think that they are taking significant share.”
External signals
Supply-chain alpha · 4returns since call
Home Depot's comparable sales growth was ~0.2% in Q3, but the underlying business (ex-storms) was ~1% and consistent with Q2, implying a ~0.8% hit from the absence of storm-related demand.
Evidence
“You can think about the GMS transaction fees as about five basis points of margin to the year... The underlying business comp, was essentially the exact same as Q2. In adjusting, again, for storm and weather, call that underlying business…”
Home Depot's online sales grew ~11% in Q3, significantly outpacing total sales growth of 2.8%, driven by faster delivery speeds from its DFC network.
SRS, which is heavily exposed to the roofing market, comped flat in Q3 while industry roofing shipments were down mid-teens, indicating substantial market share gains.
Home Depot expects to take a ~50 basis point operating expense deleverage hit in Q4 due to the 14-week vs 13-week comparison, which will compress Q4 operating margins.
Evidence
“You have all the same dynamics, but let's not forget you're comparing Q4 last year has 14 weeks of expense. Q4 this year has 13 weeks of expense. And so you've got 50-ish basis points of operating expense deleverage in the quarter.”
Methodology & coverage
Management-only analysis. All 7 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.