The Home Depot, Inc. (HD) Stock: Rises as Sales Growth Accelerates and Outlook Holds

TLDR

• Home Depot stock rose 3.11% to $406.99 after Q2 earnings.
• Same-store sales growth accelerated, led by July’s 3.3% increase.
• Revenue missed estimates slightly at $45.27 billion.
• Annual outlook reaffirmed with 1% sales growth forecast.
• Interest rate cuts seen as a potential demand catalyst.

Home Depot (NYSE: HD) closed at $406.99, up 3.11% (+$12.29) on Tuesday, August 19, 2025, after reporting second-quarter earnings.

The Home Depot, Inc. (HD)

While adjusted EPS of $4.68 missed analyst estimates of $4.72, investors focused on accelerating sales momentum and reaffirmed guidance. Same-store sales rose 1% overall, including a stronger 1.4% in the U.S., marking the third straight quarter of gains.

The company highlighted July’s 3.3% comp growth as its best monthly performance of the year, outpacing May and June’s sub-1% increases. Revenue for the quarter reached $45.27 billion, just below consensus expectations of $45.41 billion. Despite the earnings miss, investors were encouraged by improving trends, sending the stock higher even as the S&P 500 slipped 0.2%.

Consumer Spending Trends

Home Depot’s Q2 results reflected mixed consumer behavior. Ticket growth rose 1.4% during the quarter, but transaction volume declined slightly, reflecting fewer but higher-value purchases. Sales of tickets over $1,000 grew 2.6% year-over-year, driven by demand for materials like lumber and copper.

Executives noted that customers remain hesitant about large discretionary projects requiring financing, given the current interest rate environment. However, surveys of professional contractors suggested that projects are being deferred rather than canceled, supporting future demand once borrowing costs ease.

Outlook and Guidance

For the full fiscal year, Home Depot reaffirmed its forecast of 2.8% net sales growth and a 1% increase in same-store sales. Adjusted earnings per share are expected to decline by 2%, reflecting near-term cost pressures and housing market uncertainty.

CEO Ted Decker emphasized that only consistent performance—not a sharp rebound—is required to meet the company’s guidance. CFO Richard McPhail added that Home Depot’s customers remain financially healthy, with strong employment levels, income growth, and home equity gains of more than 50% since 2019. With over $11 trillion in tappable home equity, management remains confident in long-term demand.

Strategic Positioning

Home Depot is also strengthening its market position through acquisitions of SRS Distribution and GMS, expanding its reach with professional contractors and complex projects. Analysts believe this will help the retailer capture greater market share when housing and renovation activity accelerates.

Tariffs on imports may create modest pricing impacts, but with half of its goods sourced domestically, Home Depot expects to manage these pressures effectively.

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