Home Depot announced it does not plan to raise prices despite ongoing tariff pressures, crediting its long-term strategy of diversifying its supply chain. During a conference call on Tuesday, Billy Bastek, the company’s executive vice president of merchandising, said suppliers have shifted sourcing to multiple countries. Within the next year, no single foreign country is expected to account for more than 10% of Home Depot’s total purchasing.
“We don’t see broad-based price increases for our customers at all going forward,” Bastek said.
This contrasts with several other companies that have warned customers of price hikes due to escalating trade tensions. Walmart, for example, recently said it has already increased prices and expects further increases. Subaru of America also announced price hikes of up to $2,000 on some popular vehicle models.
President Donald Trump criticized Walmart on social media over the weekend, suggesting the company should absorb tariff-related costs instead of passing them to consumers. Trump has maintained that foreign exporters would bear the cost of the tariffs, but economists argue that these costs are more likely to affect U.S. businesses and contribute to inflation.
Tariffs on materials such as lumber are particularly concerning for the housing industry. Rising costs have made homeownership less attainable, with buyers now needing an annual income of at least $114,000 to afford a home at the national median listing price of $431,250, according to recent data from Realtor.com.
Home Depot has been somewhat shielded from lumber price increases, as most of its supply comes from within the U.S. In 2023, the company reported that around 17% of its wood was sourced from Canada. While Home Depot didn’t clarify if those numbers have changed, Canadian lumber was later exempted from the 25% tariffs following negotiations.
During the first quarter of the fiscal year, Home Depot reported revenue of $39.86 billion, up from $36.42 billion a year earlier, beating analyst expectations. The company has maintained its annual sales growth forecast of 2.8%, even as many other businesses have lowered projections amid global trade disruptions.
Same-store sales, a key performance metric, dipped 0.3% overall but rose 0.2% in the U.S., outperforming Wall Street’s expected 0.1% decline. Customer transactions increased 2.1%, with the average spending per transaction at $90.71, nearly identical to the year before.
Home Depot CEO Ted Decker said the quarter met expectations, driven by consistent customer interest in smaller projects and strong participation in spring events.
Still, home improvement retailers like Home Depot are being challenged by higher borrowing costs and inflation-related concerns. The housing market has remained sluggish since 2022 when mortgage rates began to rise sharply from pandemic-era lows.
Sales of existing homes have declined significantly, with March seeing a 5.9% drop from February, hitting a seasonally adjusted annual rate of 4.02 million units. This marks the slowest pace for March home sales since 2009. In fact, 2023 saw the lowest level of existing home sales in nearly three decades.
Neil Saunders, managing director at GlobalData, noted that the unstable housing market is a major challenge for Home Depot. He emphasized that despite a solid performance last quarter, falling home sales and economic uncertainty are discouraging homeowners from undertaking major renovations.
Home Depot reported a net income of $3.43 billion, or $3.45 per share, for the quarter ending May 4, slightly down from $3.6 billion, or $3.63 per share, a year earlier. Excluding certain items, adjusted earnings were $3.56 per share—just below analysts’ estimates of $3.60 per share.