AI Takeaway
Home Depot (HD) delivered FY2025 revenue growth of 3.2% to $164.7B, but profitability declined as SG&A costs surged 6.8% and net income fell 4.4% to $14.2B, reflecting margin pressure and higher operating expenses following its acquisition activity.
Revenue
$164.68B
++3.24% YoY
EPS (Basic)
$14.26
-4.68% YoY
Gross Margin
33.3%
-0.10% YoY
Operating Income
$20.89B
-2.95% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Total revenue grew 3.2% year-over-year to $164.7B in FY2025, up from $159.5B in the prior year, suggesting modest top-line expansion despite a challenging macroeconomic backdrop for home improvement spending.
Source: Source: 10-K Income Statement
Selling, General & Administrative expenses rose sharply by 6.8% to $30.7B (from $28.7B), outpacing revenue growth and contributing to a 3.0% decline in operating income to $20.9B and compression in operating margin from 13.5% to 12.7%.
Source: Source: 10-K Income Statement
Net income fell 4.4% to $14.2B and diluted EPS dropped 4.6% to $14.23 from $14.91, reflecting the combined impact of higher costs and increased interest or other below-the-line expenses relative to the prior year.
Source: Source: 10-K Income Statement
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Upgrade to unlockHome Depot completed a major acquisition (SRS Distribution) that significantly expanded its asset base and liabilities. Integration of large acquisitions carries execution risk, including potential cost overruns, cultural misalignment, and failure to achieve expected synergies, which could weigh on future profitability.
Source: Source: 10-K Balance Sheet & Cash Flow Statement
Unlock 4 more detailed risk analysis
Upgrade to unlock| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $164.68B | $159.51B | +3.24% |
Cost of Revenue | $109.82B | $106.21B | +3.40% |
Gross Profit | $54.87B | $53.31B | +2.92% |
Operating Income | $20.89B | $21.53B | -2.95% |
Net Income | $14.16B | $14.81B | -4.42% |
EPS (Basic) | $14.26 | $14.96 | -4.68% |
EPS (Diluted) | $14.23 | $14.91 | -4.56% |
SG&A Expense | $30.7B | $28.75B | +6.80% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $105.09B | $96.12B | +9.34% |
Current Assets | $34.39B | $31.68B | +8.55% |
Total Liabilities | $92.28B | $89.48B | +3.13% |
Current Liabilities | $32.42B | $28.66B | +13.13% |
Stockholders' Equity | $12.81B | $6.64B | +92.97% |
Cash & Equivalents | $1.39B | $1.66B | -16.27% |
Long-Term Debt | $49.4B | $51.37B | -3.83% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $16.32B | $19.81B | -17.59% |
Investing Cash Flow | $-8.98B | $-21.03B | +57.30% |
Financing Cash Flow | $-7.71B | $-694M | -1011.53% |
Share Buybacks | $0 | $649M | -100.00% |
D&A | $3.51B | $3.34B | +5.34% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 33.3% | 33.4% | -0.10% |
Operating Margin | 12.7% | 13.5% | -0.81% |
Net Margin | 8.6% | — | — |
ROE | 110.5% | — | — |
ROA | 13.5% | — | — |
Current Ratio | $1.061 | — | — |
Debt to Equity | $7.202 | — | — |
Other companies in Home Improvement Retail
Home Depot reported FY2025 revenue of $164.7B, up 3.2% year-over-year, but net income declined 4.4% to $14.2B as SG&A expenses surged 6.8% to $30.7B. Diluted EPS fell to $14.23 from $14.91 in the prior year, reflecting margin compression across the business.
While revenue grew 3.2%, operating costs — particularly SG&A expenses — rose 6.8%, outpacing revenue growth and squeezing operating margin from 13.5% to 12.7%. Additionally, operating cash flow dropped 17.6% to $16.3B, suggesting broader cost and working capital pressures during the year.
Key risks include integration challenges from the SRS Distribution acquisition, which significantly expanded the company's asset base and liabilities, as well as a high debt-to-equity ratio of 7.2x that limits financial flexibility. Home Depot is also exposed to housing market sensitivity, where slowing home sales or elevated mortgage rates could dampen renovation spending.
Home Depot maintains a solid but leveraged financial position, with $105.1B in total assets and $49.4B in long-term debt, resulting in a debt-to-equity ratio of 7.2x. The current ratio of 1.06x indicates adequate short-term liquidity, and the company generated $16.3B in operating cash flow, though this was down significantly from $19.8B in the prior year.
No — Home Depot did not repurchase any shares in FY2025, compared to $649M in buybacks in the prior year, representing a 100% decline. This shift likely reflects the company prioritizing debt management and integration costs following its major acquisition activity.