stockrowWhat it does
The Home Depot is a home-improvement retailer founded in 1978, headquartered in Cobb County, and led by chief executive Ted Decker. It sells home-improvement products, building materials, lawn and garden goods, décor products, and facilities maintenance, repair and operations products through stores and digital channels.
It also sells installation services, including in categories such as flooring, water heaters, baths, garage doors, cabinets, countertops, sheds, heating and central-air systems, windows, and window coverings. Tool and equipment rental is available at many locations.
Its retail stores serve consumers undertaking their own projects, homeowners who hire professionals, and professional customers. At the end of fiscal 2025, it operated 2,359 stores in the U.S., Canada and Mexico. Its stores average approximately 104,000 square feet of enclosed space plus approximately 24,000 square feet of outdoor garden area.
The company also operates distribution and fulfillment facilities, mobile applications and e-commerce websites. Its SRS business distributes roofing and exterior building products, interior and construction products, landscape supplies, and pool supplies to specialty-trade professionals. SRS, including GMS, operated more than 1,250 locations in the U.S. and Canada at the end of fiscal 2025. HD Supply provides MRO products and related services to multifamily, hospitality, healthcare and government-housing facilities.
The company employed 472,400 associates at the end of fiscal 2025.
How it makes money
The Home Depot principally earns revenue when customers buy merchandise in stores, online, through mobile applications, or through professional distribution branches. It sells national brands, proprietary brands and exclusive products. The company says proprietary products generally carry higher margins than national brands.
Its disclosed reportable business is the Primary segment, which aggregates the U.S., Canada and Mexico retail operations. That segment generated $152.0 billion in fiscal 2026 revenue, or 92.3% of revenue. Other revenue was $12.7 billion. SRS is organized into roofing and building products, interior and construction products, landscape, and pool lines of business; none is a reportable segment. HD Supply also operates within the consolidated company.
Merchandise is the principal revenue source: product net sales were $159.0 billion in fiscal 2026, while service revenue was $5.7 billion. Store assortments typically contain approximately 30,000 to 40,000 items, while online channels provide a broader extended assortment. Installation, rental, delivery, trade credit and professional sales support complement product sales.
The company competes on everyday value and offers preferred pricing and credit options to professional customers. It manages assortment, inventory, supplier relationships and sourcing costs to support product availability and margins.
Latest reported totals: fiscal 2025 net sales were $164.7 billion; second-quarter fiscal 2026 sales were $47.9 billion.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Net sales – products | $153.7 billion | — | — |
| Net sales – services | $5.8 billion | — | — |
Customers and how it sells
The Home Depot serves consumers and Pros. Consumer customers include DIY homeowners who purchase products and complete projects themselves, and DIFM homeowners who use professionals for projects or installations. Associates, digital resources, clinics and workshops support DIY customers, while installation services and in-home consultations support DIFM customers.
Pros include renovators and remodelers, general contractors, homebuilders, maintenance professionals, handymen, property managers, building-service contractors and specialty tradespeople. They work across residential, multifamily, hospitality and commercial properties, including educational, healthcare, government, institutional, office and data-center facilities. The company provides them with a dedicated sales force, Pro Xtra loyalty program, delivery options, trade credit, preferred pricing, digital tools and job-lot quantities.
The U.S. generated $152.2 billion in fiscal 2026 revenue, or 92.4% of revenue. Revenue outside the U.S. was $12.5 billion, or 7.60%, from operations in Canada and Mexico. The company also has sourcing operations in several countries.
Customers can research, purchase, receive delivery, pick up and return products across stores, websites, mobile applications, jobsites and homes. Approximately 50% of U.S. online orders in fiscal 2025 were fulfilled through a store.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| In the U.S. | $147.0 billion | — | — |
| Outside the U.S. | $12.5 billion | — | — |
Suppliers and costs
The Home Depot obtains products directly from manufacturers in the U.S. and internationally through a global sourcing program. In fiscal 2025, it maintained sourcing offices in Mexico, Canada, India, Vietnam, Taiwan, China and certain European locations. Suppliers under its standard buying agreement must meet applicable legal requirements and responsible-sourcing standards; the company conducts risk-based factory audits and compliance visits for certain suppliers of private-brand and direct-import products.
Merchandising teams work with suppliers, inventory teams and supply-chain teams on assortment, innovation, inventory levels and the cost environment. The company says strategic supplier relationships support its product assortment, while exclusive relationships and proprietary products differentiate its offer.
Its major operating costs include merchandise, associate compensation, operations, occupancy, freight, delivery and technology. Fiscal 2025 gross profit was $54.9 billion, and gross margin was 33.3%. In the second quarter of fiscal 2026, tariff refunds reduced cost of goods sold by $685 million, while fuel, energy and other product-input costs increased. The company expects those unplanned input costs to fully offset the tariff-refund benefit over the year.
- Revenue$164.7B
- Cost of revenue−$109.8B
- Selling, general and administrative−$30.7B
- Other operating costs−$3.3B
- Operating income$20.9B
Competitive position
The Home Depot operates in a highly competitive and fragmented market. It competes for customers with brick-and-mortar, multichannel and online retailers; reseller marketplaces; suppliers; service providers; distributors; manufacturers selling directly; hardware stores; building-material supply houses; lumber yards; specialty design stores; warehouse clubs; MRO distributors; wholesale distributors; and home-improvement-service and rental providers. No individual competing company is named in the available information.
Competition centers on customer experience, price, quality, availability, assortment, product innovation, store and branch location, delivery, pickup, credit, project-planning tools and post-purchase support. Digital capabilities and AI tools facilitate competitive entry, price transparency and comparison shopping.
The company’s stated competitive resources include its brand, associates, store and real-estate footprint, product assortment, supplier relationships, digital channels, supply-chain network and relationships with Pros. Its stores also function as pickup, return and delivery-fulfillment locations. In many markets, it offers same-day or next-day delivery for many products.
Our reading: The store, fulfillment and delivery network is a moat source because it combines 2,359 stores with distribution facilities and store-based online fulfillment. (item1, item7)
Our reading: Professional-customer capabilities are a moat source because they combine sales support, credit, delivery, loyalty tools and SRS product access. (item1, call_qa)
Our reading: Supplier relationships, proprietary products and exclusive arrangements are a moat source because they can differentiate assortment and support margins. (item1)
Growth opportunities
The company’s growth strategy centers on its core retail business, an interconnected store-and-digital experience, and professional customers. It is investing in stores, delivery, supply chain, digital tools, product assortment and professional capabilities.
The company sizes the Pro opportunity at $700.0 billion and its total addressable market at $1.20 trillion after adding HVAC distribution. It completed the acquisition of Mingledorff’s, an HVAC distributor serving residential and commercial customers through 42 locations in five Southeastern U.S. states. The company expects to build HVAC into SRS’s fifth vertical through modest acquisitions in key manufacturer geographies.
SRS and GMS expand the company’s specialty distribution offering to roofing, exterior products, interior construction products, landscape and pool products. The company expects SRS to deliver mid-single-digit percent organic sales growth in fiscal 2026. It plans to open approximately 15 new stores and 40 to 50 new SRS branches in fiscal 2026.
Delivery is another investment area. The company reduced U.S. big-and-bulky delivery lead times by approximately 45% over the preceding 18 months. More than 65% of deliveries for in-stock parcel products are same-day or next-day, and approximately 55% of stocked big-and-bulky deliveries are completed within two days. It also launched nationwide express delivery for tens of thousands of products in three hours or less.
For fiscal 2026, the company expects comparable sales ranging from flat to 2% growth and total sales growth of approximately 2.5% to 4.5%.
- $151.2BFY2022
- $157.4BFY2023
- $152.7BFY2024
- $159.5BFY2025
- $164.7BFY2026
Structural risks
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Demand risk: Adverse housing and home-improvement conditions, economic conditions, consumer confidence, interest rates and housing affordability can reduce or delay spending on projects. The company identified continuing pressure on larger home-improvement projects.
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Competition and customer-expectation risk: Retail, distribution and digital competitors can increase price transparency and comparison shopping. The company may not timely identify or respond to customer needs, expectations or trends.
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Technology and cybersecurity risk: Its interconnected experience depends on continual investment in information technology, new systems and processes. Failures in customer-facing systems could impair sales and customer experience, while cybersecurity threats also extend to third-party service providers, business partners and acquired companies.
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Supply-chain and cost risk: Tariffs, fuel, energy, commodity inputs, transportation and other product costs can raise costs. The company cannot predict the ultimate effects of evolving trade-policy developments on future results and cash flows.
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Brand, safety and workforce risk: Reputation damage, adverse publicity, unsafe shopping or work environments, compensation costs and difficulty recruiting or retaining associates can affect demand, costs, operations and relationships with suppliers and customers.
Bottom line
Our reading
Our reading: The Home Depot is a merchandise-led home-improvement retailer whose store network, digital channels and delivery operations also support professional customers and specialty distribution. (item1, item7)
Our reading: The business is exposed to housing turnover, larger-project demand, input costs and a competitive retail environment, while it is expanding SRS, GMS and HVAC distribution capabilities. (item1a, call_prepared, call_qa)
Our reading: Its reported growth program combines new stores and branches with professional tools, broader specialty-trade product access and faster fulfillment. (item1, call_prepared)