Home Depot reported stronger-than-expected revenue in the first quarter of fiscal 2025, as customer spending edged up despite a broader slowdown in large-scale home improvement activity.
Revenue rose to $39.86 billion for the quarter ended May 4, up from $36.42 billion a year earlier and surpassing the $39.3 billion forecast by analysts surveyed by FactSet.
The performance reflects steady consumer interest in smaller, seasonal projects even as high borrowing costs continue to deter major renovations.
“Our first quarter results were in line with our expectations as we saw continued customer engagement across smaller projects and in our spring events,” said Chair and CEO Ted Decker in a statement on Tuesday.
Sales at stores open at least one year, a key indicator of retail health, fell 0.3% overall, though U.S. comparable store sales rose slightly by 0.2%. Wall Street had anticipated a 0.1% decline, making the domestic results a modest positive surprise.
Customer transactions increased 2.1% year over year, and the average ticket value climbed slightly to $90.71, compared to $90.68 during the same period last year.
Net income for the quarter was $3.43 billion, or $3.45 per share, down from $3.6 billion, or $3.63 per share, a year ago. Adjusted earnings came in at $3.56 per share, just under the $3.60 consensus forecast.
Despite the slight earnings miss, investors appeared encouraged by the top-line growth and stable customer activity. Shares of Home Depot rose about 2% in pre-market trading.
The home improvement sector continues to face challenges, as elevated mortgage rates and persistent inflation weigh on homeowner confidence and larger project planning.
Home Depot, like peers, has seen a shift toward smaller purchases as customers delay renovations that require financing.
The US housing market has been in a prolonged slowdown since 2022. According to the National Association of Realtors, existing home sales dropped 5.9% in March from February to an annual rate of 4.02 million units, the sharpest monthly decline since late 2022, and the slowest March pace since 2009.
Still, Home Depot maintained its full-year guidance, projecting approximately 2.8% sales growth for fiscal 2025.
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