Home Depot(HD 2.93%) reported earnings for the fiscal second quarter ended Aug. 4, 2025, on August 19, 2025, with total sales of $45.3 billion, up 4.9% year-over-year, and U.S. same-store sales (comps) increased 1.4%. Adjusted diluted earnings per share reached $4.68, remaining broadly flat year-over-year, as the company demonstrated broad-based category strength and continued to execute its professional (Pro) ecosystem expansion, including the pending acquisition of GMS.

Pro ecosystem expansion strengthens Home Depot’s competitive moat

The company completed the acquisition of SRS last year, which brought substantial cross-selling opportunities and accelerated strategic momentum, and announced the pending acquisition of GMS in June 2025, adding 400 distribution locations to SRS’s existing 800. In total, SRS will operate 1,200 distribution nodes and a sales force of 3,500, creating a unique national platform for serving complex Pro customers.

"we are excited about the pending acquisition of GMS, a leading distributor of specialty building products, including drywall, ceilings, and steel framing, related to remodeling and construction projects. This acquisition will add a highly complementary adjacent vertical to SRS's business, differentiated capabilities, product categories, and customer relationships. It will also broaden SRS's distribution footprint across the U.S. and Canada. In fact, SRS will now have a network of more than 1,200 locations, a sales operation of over 3,500 associates, and a fleet of nearly 8,000 trucks capable of making tens of thousands of job site deliveries per day. Additionally, GMS will be additive to our organic efforts to better serve pros working on complex projects, enabling us to offer a deeper and broader assortment of interior building products and services, as well as additional fulfillment options."
-- Ted Decker, Chair, President and CEO

By unifying specialty distribution and retail assets, the company is building an unmatched service and logistics platform, positioning itself to capture share from fragmented local and regional suppliers in lucrative Pro verticals.

Accelerating digital and delivery drives omnichannel engagement

Online comparable sales rose approximately 12% year-over-year, aided by double-digit increases in customer spend where faster delivery options were used, and the implementation of machine-learning-based fulfillment. Home Depot now claims the fastest same-day and next-day delivery speeds for the widest assortment in its history.

"We have continued to improve delivery times, and we now have the fastest delivery speeds across the greatest number of products in company history, both same day and next day. We're seeing a double-digit lift in spend with customers who utilize our faster delivery options as they return more frequently to shop in stores and online. This is all a result of our efforts to ship from the best location, which uses machine learning models to determine the optimal delivery mode to maximize speed and efficiency."
-- Ann-Marie Campbell, Senior Executive Vice President

The ongoing investments in end-to-end digital and fulfillment infrastructure are directly supporting sales and customer retention.

Home Depot maintains disciplined capital allocation and high returns

Return on invested capital (ROIC) at the end of the fiscal second quarter ended Aug. 4, 2025, stood at 27.2%, down from 31.9% a year earlier, as capital investment continued into ecosystem expansion and strategic assets like SRS and the development of distribution centers (DFCs). Operating margin was 14.5% (adjusted 14.8%), while the company returned $2.3 billion to shareholders via dividends.

"When you think about an SRS branch, comparatively speaking, the capital required and then the return on that capital through time is actually lower capital required on a percent of sales basis than a Home Depot store would be. And the return on that capital actually comes more quickly than it does at a Home Depot store. And by the way, we think that the Home Depot store is one of the most rock-solid investments we can make, which is why we've leaned into that program. So SRS, wholesale distribution, a capital-light model. Second, our DFCs. If you take our DFCs and you look at where they are on their maturity curve, they're actually generating higher returns on invested capital than an equivalent Home Depot store would at this point in their life cycle."
-- Richard McPhail, Executive Vice President and CFO

The company’s acquisition and organic growth strategy in Pro and digital is capital-efficient, with new platforms generating superior incremental returns and reinforcing Home Depot’s ability to fund both expansion and shareholder distributions without compromising balance sheet strength.

Looking Ahead

Management reaffirmed its fiscal 2025 guidance, projecting total sales growth of approximately 2.8% and comparable sales growth of 1% year-over-year, alongside gross margin at 33.4% and adjusted operating margin at 13.4% for fiscal 2025. Diluted earnings per share are expected to decline approximately 3% compared to fiscal 2024 (approximately 2% on an adjusted basis and essentially flat on a 52-week basis), with capital expenditures guided toward 2.5% of sales for fiscal 2025. The guidance excludes potential impacts from the pending GMS acquisition, foreign exchange fluctuations, and any recovery in large-scale remodeling projects.