Home improvement retailer Home Depot reaffirmed its full-year sales forecast despite missing Wall Street’s first-quarter earnings expectations, with Chief Financial Officer Richard McPhail stating the company does not plan to raise prices in response to rising tariffs, CNBC reports.
Speaking in an interview with CNBC on Tuesday, McPhail highlighted Home Depot’s diversified supply chain and strong supplier relationships as key factors enabling the company to maintain current pricing levels.
“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,” he said.
More than half of Home Depot’s merchandise is sourced domestically, and the company has been actively diversifying its import origins in recent years, reducing reliance on China. McPhail noted that by next year, no single country outside the US will account for more than 10% of Home Depot’s purchases.
This pricing approach contrasts with retailers like Walmart, which recently announced plans to raise prices later this month due to increased costs from tariffs.
Home Depot reported first-quarter revenue of $39.86 billion, slightly above analysts’ expectations of $39.31 billion, but its adjusted earnings per share came in at $3.56, just below the anticipated $3.60. The company’s net income for the quarter was $3.43 billion, down from $3.60 billion in the same period last year. Despite the earnings miss, shares rose more than 2% in premarket trading.
Spring typically marks Home Depot’s busiest season, driven by increased home improvement projects. However, the ongoing impact of higher interest rates has softened demand in the housing market, leading many consumers to delay major renovations or home purchases. Comparable sales across the company declined 0.3% in the first quarter, though US comparable sales edged up 0.2%.
McPhail attributed a weak February to poor weather but noted an improving trend with sales rising in March and April.
“We clawed our way back through the remainder of the quarter and had a great April, and we’ve seen the level of customer engagement that we saw in April continue into the first few weeks of May,” he said.
To counteract market challenges, Home Depot has increasingly focused on professional customers. The retailer’s $18.25 billion acquisition of SRS Distribution, a supplier to roofing, pool, and landscaping professionals, contributed about $2.6 billion in year-over-year sales growth during the quarter.
Overall, Home Depot’s customer base is described as relatively affluent and stable, with around 80% of buyers being homeowners. McPhail noted that while do-it-yourself customers are postponing larger projects, they continue to engage in smaller, seasonal improvements.
Despite soft sales in higher-end categories such as kitchen countertops and bathroom fixtures, the company reported strong demand for appliances, gardening, plumbing, and electrical products. Its recent spring Black Friday event also drew positive customer response.
Home Depot’s shares have declined about 2% year to date.
