Home Depot said Tuesday it has no plans to raise prices despite rising tariff costs, diverging from peers like Walmart and Stanley Black & Decker that are warning of consumer price hikes. The announcement came as the home improvement giant reported fiscal first-quarter revenue of $39.86 billion and reaffirmed its full-year sales forecast.
"Because of our scale, the great partnerships we have with our suppliers and productivity that we continue to drive in our business, we intend to generally maintain our current pricing levels across our portfolio," Chief Financial Officer Richard McPhail said in an interview with CNBC.
Home Depot reported adjusted earnings per share of $3.56, slightly below analysts' consensus estimate of $3.60, according to LSEG. Net income for the quarter ended May 4 was $3.43 billion, or $3.45 per share, compared to $3.60 billion, or $3.63 per share, a year earlier. Despite the earnings miss, shares rose more than 2% in premarket trading.
The retailer said it expects total sales to grow 2.8% this fiscal year, with comparable sales rising 1%, assuming tariffs on Chinese goods remain capped at 30%, and 10% for many others. More than half of Home Depot's merchandise is sourced from within the United States, and McPhail said no single foreign country would account for more than 10% of purchases by this time next year.
By contrast, Walmart recently warned it would raise prices as early as late May to offset tariff-related cost increases. "The higher tariffs will result in higher prices," Walmart CEO Doug McMillon said last week.
President Donald Trump, who has reimposed broad-based tariffs on Chinese goods and pressured corporations to absorb the costs, took aim at Walmart, saying, "Walmart should STOP trying to blame Tariffs... I'll be watching, and so will your customers!!!"
In response to a softer housing market and high interest rates discouraging major renovation projects, Home Depot has leaned into growth through professional contractors. Its acquisition of SRS Distribution for $18.25 billion added $2.6 billion in revenue during the quarter.
Comparable sales companywide dropped 0.3% in Q1, while U.S. comparable sales edged up 0.2%. Sales growth improved sequentially each month, with a 3.3% year-over-year decline in February, a 1.3% increase in March, and a 1.8% gain in April.
McPhail attributed February's weakness to weather and noted stronger customer engagement since. "We clawed our way back through the remainder of the quarter and had a great April," he said.
Customer transactions rose 2.1% year-over-year, and average ticket value reached $90.71, slightly up from the prior year. However, do-it-yourself consumers have scaled back on large remodeling jobs, with stronger performance in seasonal categories such as garden, plumbing, appliances, and electrical.
Sales in categories like kitchen and bath were softer, reflecting delayed discretionary spending. McPhail noted, "Our customer is healthy, and we think that's what has supported their level of engagement in home improvement."
Home Depot's market capitalization stood at $377 billion as of Monday, with shares down about 2% year-to-date, lagging the S&P 500's 1% gain over the same period.
