Home Depot Announces 2Q Results, Updates Guidance

ATLANTA — The Home Depot^® reported sales of $43.2 billion for the second quarter of fiscal 2024, an increase of 0.6% from the second quarter of fiscal 2023. Total sales include $1.3 billion from the recent acquisition of SRS Distribution Inc. (SRS), which represents approximately six weeks of sales in the quarter. Comparable sales for the second quarter of fiscal 2024 decreased 3.3%, and comparable sales in the U.S. decreased 3.6%.

Operating income for the second quarter of fiscal 2024 was $6.5 billion and operating margin was 15.1%, compared with operating income of $6.6 billion and an operating margin of 15.4% for the second quarter of fiscal 2023.

Adjusted⁽¹⁾ operating income for the second quarter of fiscal 2024 was $6.6 billion and adjusted⁽¹⁾ operating margin was 15.3%, compared with adjusted operating income of $6.6 billion and an adjusted operating margin of 15.5% for the second quarter of fiscal 2023.

Net earnings for the second quarter of fiscal 2024 were $4.6 billion, or $4.60 per diluted share, compared with net earnings of $4.7 billion, or $4.65 per diluted share, in the same period of fiscal 2023.

Adjusted⁽¹⁾ diluted earnings per share for the second quarter of fiscal 2024 were $4.67, compared with adjusted diluted earnings per share of $4.68 in the same period of fiscal 2023.

“The underlying long-term fundamentals supporting home improvement demand are strong,” said Ted Decker, chair, president and CEO. “During the quarter, higher interest rates and greater macro-economic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects. However, the team continued to navigate this unique environment while executing at a high level. I would like to thank our associates for their hard work and dedication to serving our customers and communities.”

Fiscal 2024 Guidance

The company updated its fiscal 2024 guidance, which includes 53 weeks of operating results, to reflect the performance in the first half of fiscal 2024 and include SRS:

• Total sales to increase between 2.5% and 3.5% including the 53^rdweek
  • 53^rdweek projected to add approximately $2.3 billion to total sales
  • SRS expected to contribute approximately $6.4 billion in incremental sales
• Comparable sales to decline between 3% and 4% for the 52-week period compared to fiscal 2023
  • Comparable sales decline of 3% implies a consumer demand environment consistent with the first half of fiscal 2024
  • While comparable sales for the company are not currently on the trajectory for the low end of the range, a 4% decline implies incremental pressure on consumer demand
• Approximately 12 new stores
• Gross margin of approximately 33.5%
• Operating margin rate to be between 13.5% to 13.6%
• Adjusted^{(1), (2)}operating margin rate to be between 13.8% to 13.9%
• Tax rate of approximately 24%
• Net interest expense of approximately $2.2 billion
• 53-week diluted earnings-per-share-percent decline between 2% and 4%
  • 53^rdweek expected to contribute approximately $0.30 of diluted earnings per share compared to fiscal 2023
• 53-week adjusted^{(1), (3)}diluted earnings-per-share to decline between 1% and 3%
  • 53^rdweek expected to contribute approximately $0.30 of adjusted diluted earnings per share compared to fiscal 2023

At the end of the second quarter, the company operated a total of 2,340 retail stores and over 760 branches across all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. The Company employs over 465,000 associates. The Home Depot’s stock is traded on the New York Stock Exchange (NYSE: HD) and is included in the Dow Jones industrial average and Standard & Poor’s 500 index.

(1) The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). As used above and throughout this earnings release, adjusted operating income, adjusted operating margin, and adjusted diluted earnings per share are non-GAAP financial measures. Refer to the end of this release for an explanation of these non-GAAP financial measures and a reconciliation of the historical non-GAAP financial results used in this release to comparable GAAP results.

(2) Excludes an expected approximately 30 basis point impact from acquired intangible asset amortization.

(3) Excludes an expected after-tax impact of approximately $0.30 from acquired intangible asset amortization.