Home Depot Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Zachary Fadem - Wells Fargo Securities LLC - Analyst : Starting with the July improvement and if you view this more of a catch up due to weather or underlying change in trend, and then as you think about the second half comp, about a 50 basis point improvement implied from Q2, couple points on a two year basis, perhaps we could level set on the drivers across traffic, ticket pricing, et cetera and whether you anticipate any changes there.

Question: Zachary Fadem - Wells Fargo Securities LLC - Analyst : And then just to follow up, there's been a lot more talk about the potential for rate cuts later this year and we also have some tax reform dynamics as well, so just curious to what extent these could be positive catalysts for your business and if you have any thoughts on the level of rate cut you'd need to see to begin seeing that impact. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 19, 2025 / 1:00PM, HD.N - Q2 2025 Home Depot Inc Earnings Call

Question: Steven Zaccone - Citibank Cameroon SA - Analyst : I want to follow up on Zach's second question there. Ted, when you think about some of the clarity you've gotten on the tax package and then we're waiting on rates, how does it inform your view on the shape of recovery in that large [project] activity? As we sit here today, do you think that's something that can materialize in the next 12 months?

Question: Steven Zaccone - Citibank Cameroon SA - Analyst : And then maybe just for the second half of the year, can you help us think a bit more about AUR and pricing? How did that perform in the quarter? It sounds like promotional activity was down a bit, but just as you think about the second half of the year, the complexion of ticket and transaction, how does pricing fit into that equation? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 19, 2025 / 1:00PM, HD.N - Q2 2025 Home Depot Inc Earnings Call

Question: Steven Zaccone - Citibank Cameroon SA - Analyst : Best of luck in the second half.

Question: Christopher Horvers - JPMorgan Chase & Co - Analyst : So my first question is more near term than my thought. It's a bit more bigger picture. So following up on this last line in the question, there are a number of like puts and takes on in the back half around comp cadence that I'd love for you to talk about. Do you expect much difference between the quarters? It looks like the hurricane lift was pretty similar, but then ticket inflation given inventory receipts and seasonal probably accelerates over the year, but on the other side of this, you have this sort of euphoric December post-election with the consumer. So any thoughts there on the puts and takes of comp cadence in the back half?

Question: Christopher Horvers - JPMorgan Chase & Co - Analyst : And then bigger picture, on GMS, could you compare and contrast the business relative to the roofing business, which is SRS's largest vertical? From the outside, it seems to some that GMS is maybe more commodity oriented and something that perhaps you could have achieved through the expanded fulfillment offering that you have in about 20 markets in the large Pro side. Is there something particularly in the assets that you want to acquire that was easier to buy than build? Is it sort of drywall, so foundational and so that's it's a big part of the market? Is it the sales force and so forth?

Question: Simeon Gutman - Morgan Stanley - Analyst : I want to follow up please on -- with a phrase that Richard, you used in prepared remarks, and then I think Ted said it again, this notable improvement in underlying demand. You qualified it with some commentary around weather. I assume also maybe bathtub effect is the same definition. Can you talk about the degree to which you think there is underlying turning in housing, or was this market share or was this weather? Are we seeing an inflection?

Question: Simeon Gutman - Morgan Stanley - Analyst : And follow up, can I ask about proof points on complex projects or complex pro? Are you seeing sequential inflections whether it's some of the core capabilities that Home Depot has implemented or related to crossover benefits from SRS? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 19, 2025 / 1:00PM, HD.N - Q2 2025 Home Depot Inc Earnings Call

Question: Scot Ciccarelli - Truist Securities - Analyst : I guess this is a bit of a follow up to Simeon's question. You had previously given us some figures on the incremental sales you've been able to generate from your complex pro efforts. Can you update us on that most recent performance and where you have rolled it out? Obviously, you just talked about kind of the what's better happening, but how should we be thinking about the growth curve in those markets?

Question: Michael Lasser - UBS AG - Analyst : So over the last several years, Home Depot has taken some big swings, made some big calls including building the pro ecosystem, buying SRS and now GMS. Are these calls driven by something that you are seeing that is changing in the home improvement market or something that's changing in the Home Depot that's needing the -- prompting the need to take bigger calls in order to gain market share? And it's part of this, how do you weigh the potential trade-off between growth and returns in these capital allocation decisions, or is that just a moot point because Home Depot is going to be able to achieve both in a robust recovery situation in the next few years.

Question: Michael Lasser - UBS AG - Analyst : My quick follow up is the decision to reduce promotional activity during the quarter was tied to the tariff situation. So A, how do you expect this to unfold? It's likely that tariffs are going to be with us for a while. Does that mean Home Depot's posture around promotional activity will be reduced? And B, how do you expect this to impact the P&L over the next few quarters and what have you assumed that within your guidance?

Question: Charles Grom - Gordon Haskett Capital Corp - Analyst : My question is for Billy. On category performance, I was hoping you could maybe double click on the areas where the business has most notably improved. You guys have called out 12 out of the 16 categories. That's the best breath of performance, I think, since, the second quarter of '22. So maybe just click on the categories a little bit and then also regionally, any call outs in the quarter?

Question: Charles Grom - Gordon Haskett Capital Corp - Analyst : And then I thought just on -- for Richard on gross margins flat year over year. Can we just talk about the moving parts in the quarter? How you're thinking about the cadence in the back half, and then zooming out, I think this will be the third straight year gross margins will be around 33.4%. I guess how you're thinking about that line item in the out years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 19, 2025 / 1:00PM, HD.N - Q2 2025 Home Depot Inc Earnings Call