Home Depot, Inc.: Q4 FY2025 earnings call

What management said about Q4 FY2025, from the documents filed with the SEC on 24 February 2026: press release. Guidance figures: 13 new. The quarter’s numbers.

Key takeaways

Fourth-quarter sales fell 3.8%: Sales were $38.2 billion, down 3.8%. The quarter had 13 weeks against 14 a year earlier, and the 14th week added about $2.5 billion of sales in fiscal 2024. Source
Fiscal 2025 sales and EPS: Fiscal 2025 sales were $164.7 billion, up 3.2%. Diluted EPS was $14.23 against $14.91, and adjusted diluted EPS was $14.69 against $15.24. Source
Fewer transactions, higher ticket: Comparable customer transactions fell 1.6% in the fourth quarter while comparable average ticket rose 2.4%, after transactions rose 0.6% and ticket rose 0.2% a year earlier. Source
Operating margin fell on lower sales: Operating income fell 14.4% to $3.8 billion in the fourth quarter. Operating margin was 10.1% against 11.3%, and 12.7% for the year against 13.5%. Source
Underlying demand stable through year: Adjusting for storms, management described underlying demand as relatively stable throughout fiscal 2025. Source
Sales growth guided 2.5% to 4.5%: Total sales growth for fiscal 2026 is guided to approximately 2.5% to 4.5%, with comparable sales growth of approximately flat to 2.0%. Source
Diluted EPS guided flat to 4% growth: Diluted EPS is guided to grow approximately flat to 4.0% from $14.23, and adjusted diluted EPS to grow approximately flat to 4.0% from $14.69. Source

“For the fourth quarter, our results were largely in-line with our expectations, reflecting the lack of storm activity in the third quarter and ongoing consumer uncertainty and pressure in housing.”
Ted Decker, chair, president and CEO

Guidance

Area	Period	Figure	Against last quarter
Total sales growth Source	Fiscal 2026	approximately 2.5% to 4.5%	New
Comparable sales growth Source	Fiscal 2026	approximately flat to 2.0%	New
New stores Source	Fiscal 2026	Approximately 15	New
Gross margin Source	Fiscal 2026	approximately 33.1%	New
Operating margin Source	Fiscal 2026	approximately 12.4% to 12.6%	New
Adjusted operating margin Source	Fiscal 2026	approximately 12.8% to 13.0%	New
Effective tax rate Source	Fiscal 2026	approximately 24.3%	New
Net interest expense Source	Fiscal 2026	approximately $2.3 billion	New
Diluted EPS growth Source	Fiscal 2026	approximately flat to 4.0% from $14.23 in fiscal 2025	New
Adjusted diluted EPS growth Source	Fiscal 2026	approximately flat to 4.0% from $14.69 in fiscal 2025	New
Capital expenditures Source	Fiscal 2026	approximately 2.5% of total sales	New
Amortization excluded from adjusted operating margin Source	Fiscal 2026	approximately 40 basis points	New
Amortization excluded from adjusted diluted EPS Source	Fiscal 2026	approximately $0.50 after-tax	New

What changed from last quarter

New guidance: Fiscal 2026 guidance was provided for sales growth, comparable sales, margins, tax rate, interest, EPS and capital expenditures. Source
New: The quarterly dividend was raised 1.3% to $2.33 per share, an annual $9.32. Source

Fourth quarter and fiscal 2025 results

Fourth-quarter sales fell 3.8%: Sales were $38.2 billion, down 3.8%. The quarter had 13 weeks against 14 a year earlier, and the 14th week added about $2.5 billion of sales in fiscal 2024. Source
Comparable sales rose slightly: Comparable sales rose 0.4% and U.S. comparable sales rose 0.3%, against 0.8% comparable sales growth in the same quarter of fiscal 2024. Source
Fourth-quarter EPS fell on fewer weeks: GAAP diluted EPS was $2.58 against $3.02. The 14th week added about $0.30 to adjusted diluted EPS in fiscal 2024, which the company cited in the comparison. Source
Fiscal 2025 sales and EPS: Fiscal 2025 sales were $164.7 billion, up 3.2%. Diluted EPS was $14.23 against $14.91, and adjusted diluted EPS was $14.69 against $15.24. Source

Store network, SRS and GMS

Store and SRS footprint grew: At quarter end the company had 2,359 retail stores, up from 2,356, and over 1,250 SRS locations, up from over 1,200 at the third quarter. Source
SRS acquisition amortization totals: Acquired intangible amortization tied to SRS was $118 million in the fourth quarter and $398 million for the fiscal year. Source
GMS added to third-quarter sales: In the third quarter GMS added roughly $900 million of sales, representing about eight weeks of sales in that quarter.
Associate count over 470,000: The company employs over 470,000 associates, the same count given in the third-quarter release, and its stock is listed on the NYSE. Source

“Throughout fiscal 2025, our teams did an incredible job engaging with our customers and growing market share, and I would like to thank them for their hard work and dedication,”
Ted Decker, chair, president and CEO

Customers, transactions and ticket

Fewer transactions, higher ticket: Comparable customer transactions fell 1.6% in the fourth quarter while comparable average ticket rose 2.4%, after transactions rose 0.6% and ticket rose 0.2% a year earlier. Source
Fiscal transactions down 2.2%: Customer transactions totaled 1,601.5 million for fiscal 2025, down 2.2%. Average ticket rose 1.4% to $90.56 for the year. Source
Quarterly average ticket reached $91.28: Average ticket was $91.28 in the fourth quarter, up from $89.11. The company notes these measures exclude HD Supply and SRS, including GMS. Source

Costs, margins and profit

Gross profit fell with sales: Gross profit was $12.5 billion in the fourth quarter, down 4.4%, as cost of sales fell 3.5%. For the fiscal year gross profit rose 2.9% to $54.9 billion. Source
Operating margin fell on lower sales: Operating income fell 14.4% to $3.8 billion in the fourth quarter. Operating margin was 10.1% against 11.3%, and 12.7% for the year against 13.5%. Source
Adjusted margin excludes amortization: Adjusted operating margin was 10.5% in the fourth quarter against 11.7%, after adding back $171 million of acquired intangible amortization. The fiscal figure was 13.1% against 13.8%. Source
SG&A up 6.8% for the year: Selling, general and administrative expense rose 6.8% to $30.7 billion for the year and 0.6% in the fourth quarter. Interest and other, net rose 7.9% to $2.3 billion. Source

Demand, storms and inventory

Expected third-quarter demand rise absent: In the third-quarter release, management said underlying demand was relatively stable sequentially, but an expected third-quarter demand increase did not materialize.
Underlying demand stable through year: Adjusting for storms, management described underlying demand as relatively stable throughout fiscal 2025. Source
Inventory rose, payables fell: Merchandise inventories were $25.8 billion, up from $23.5 billion at the prior year end. Accounts payable fell to $11.5 billion from $11.9 billion. Source

Cash flow, capital and shareholder returns

Operating cash flow fell: Net cash provided by operating activities was $16.3 billion for fiscal 2025, against $19.8 billion. Changes in working capital were a $3.1 billion outflow. Source
Acquisition payments fell sharply: Payments for businesses acquired were $5.4 billion, down from $17.6 billion. Capital expenditures rose to $3.7 billion from $3.5 billion. Source
Quarterly dividend raised 1.3%: The board raised the quarterly dividend 1.3% to $2.33 per share. The company paid cash dividends of $9.2 billion for the fiscal year. Source
No share repurchases in fiscal 2025: The company made no repurchases of common stock in fiscal 2025, against $649 million in the prior year. Cash dividends were $9.2 billion. Source
Short-term debt and equity rose: Short-term debt was $4.5 billion against $0.3 billion a year earlier. Total stockholders' equity was $12.8 billion against $6.6 billion. Source

Fiscal 2026 guidance

Sales growth guided 2.5% to 4.5%: Total sales growth for fiscal 2026 is guided to approximately 2.5% to 4.5%, with comparable sales growth of approximately flat to 2.0%. Source
Diluted EPS guided flat to 4% growth: Diluted EPS is guided to grow approximately flat to 4.0% from $14.23, and adjusted diluted EPS to grow approximately flat to 4.0% from $14.69. Source
Margin and tax guidance set: Gross margin is guided to approximately 33.1% and operating margin to 12.4% to 12.6%. Adjusted operating margin is guided to 12.8% to 13.0%, with an effective tax rate of approximately 24.3%. Source
Acquired amortization excluded from adjusted guidance: Adjusted guidance excludes an expected approximately 40 basis point operating margin impact and an after-tax EPS impact of approximately $0.50 from acquired intangible amortization. Source

Coming up, as management said on 24 February 2026

Quarterly dividend payment date: The quarterly dividend is payable March 26, 2026, to holders of record at the close of business on March 12, 2026. Source
About 15 new stores in fiscal 2026: Management plans approximately 15 new stores during fiscal 2026. Source
Capital expenditure plan: Capital expenditures are planned at approximately 2.5% of total sales in fiscal 2026. Source

Figures management reported

Figure	Reported
Comparable sales Source	Q4 +0.4%; U.S. +0.3%; fiscal 2025 +0.3%; U.S. +0.5%
Customer transactions Source	Q4 366.5 million, down 8.5%; fiscal 2025 1,601.5 million, down 2.2%
Average ticket Source	Q4 $91.28, up 2.4%; fiscal 2025 $90.56, up 1.4%
Comparable customer transactions Source	Q4 -1.6%; fiscal 2025 -1.0%
Merchandise inventories Source	$25,817 million, up from $23,451 million
Store count Source	2,359 retail stores at end of fourth quarter, up from 2,356
Gross profit Source	Q4 $12,466 million, down 4.4%; fiscal 2026 gross margin guided to approximately 33.1%

Risks management discussed

Demand: Management said consumer uncertainty and housing pressure were disproportionately affecting home improvement demand.
External: Management cited the lack of storm activity in the third quarter as a factor in fourth-quarter results. Source

Earlier plans management reported on

Not stated: Management described fourth-quarter results as largely in line with its expectations. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

The Home Depot Announces Fourth Quarter and Fiscal 2025 Results;

Increases Quarterly Dividend by 1.3%;

Provides Fiscal 2026 Guidance

ATLANTA, February 24, 2026 -- The Home Depot®, the world's largest home improvement retailer, today reported fourth quarter and fiscal 2025 results.

Fourth Quarter 2025

Sales for the fourth quarter of fiscal 2025 were $38.2 billion, a decrease of $1.5 billion, or 3.8% from the fourth quarter of fiscal 2024. The fourth quarter of fiscal 2025 consisted of 13 weeks compared with 14 weeks for the prior year. The 14th week in fiscal 2024 added approximately $2.5 billion of sales to the fourth quarter and the year.

Comparable sales for the fourth quarter of fiscal 2025 increased 0.4%, and comparable sales in the U.S. increased 0.3%.

Net earnings for the fourth quarter of fiscal 2025 were $2.6 billion, or $2.58 per diluted share, compared with net earnings of $3.0 billion, or $3.02 per diluted share, in the same period of fiscal 2024. The 14th week in fiscal 2024 added approximately $0.30 to diluted earnings per share to the fourth quarter and the year.

Adjusted diluted earnings per share for the fourth quarter of fiscal 2025 were $2.72, compared with adjusted diluted earnings per share of $3.13 in the same period of fiscal 2024. The 14th week in fiscal 2024 added approximately $0.30 to adjusted diluted earnings per share to the fourth quarter and the year.

Fiscal 2025

Sales for fiscal 2025 were $164.7 billion, an increase of $5.2 billion, or 3.2% from fiscal 2024. Comparable sales for fiscal 2025 increased 0.3%, and comparable sales in the U.S. increased 0.5%.

Net earnings for fiscal 2025 were $14.2 billion, or $14.23 per diluted share, compared with net earnings of $14.8 billion, or $14.91 per diluted share in fiscal 2024.

Adjusted diluted earnings per share for fiscal 2025 were $14.69, compared with adjusted diluted earnings per share of $15.24 in fiscal 2024.

(1) The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). As used in this earnings release, adjusted operating income, adjusted operating margin, and adjusted diluted earnings per share are non-GAAP financial measures. Refer to the end of this release for an explanation of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures.

“Throughout fiscal 2025, our teams did an incredible job engaging with our customers and growing market share, and I would like to thank them for their hard work and dedication,” said Ted Decker, chair, president and CEO. “For the fourth quarter, our results were largely in-line with our expectations, reflecting the lack of storm activity in the third quarter and ongoing consumer uncertainty and pressure in housing. Adjusting for storms, underlying demand was relatively stable throughout the year.”

Dividend Declaration

The Company today announced that its board of directors approved a 1.3% increase in its quarterly dividend to $2.33 per share, which equates to an annual dividend of $9.32 per share.

The dividend is payable on March 26, 2026, to shareholders of record at the close of business on March 12, 2026. This is the 156th consecutive quarter the Company has paid a cash dividend.

Fiscal 2026 Guidance

The company provides the following guidance for fiscal 2026:

Total sales growth of approximately 2.5% to 4.5%
Comparable sales growth of approximately flat to 2.0%
Approximately 15 new stores
Gross margin of approximately 33.1%
Operating margin of approximately 12.4% to 12.6%
Adjustedoperating margin of approximately 12.8% to 13.0%
Effective tax rate of approximately 24.3%
Net interest expense of approximately $2.3 billion
Diluted earnings-per-share to grow approximately flat to 4.0% from $14.23 in fiscal 2025
Adjusted diluted earnings-per-share to grow approximately flat to 4.0% from $14.69 in fiscal 2025
Capital expenditures of approximately 2.5% of total sales

The Home Depot will conduct a conference call today at 9 a.m. ET to discuss information included in this news release and related matters. The conference call will be available in its entirety through a webcast and replay at ir.homedepot.com/events-and-presentations.

At the end of the fourth quarter, the company operated a total of 2,359 retail stores and over 1,250 SRS locations across all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. The Company employs over 470,000 associates. The Home Depot's stock is traded on the New York Stock Exchange (NYSE: HD) and is included in the Dow Jones industrial average and Standard & Poor's 500 index.

Cautionary Note Regarding Forward-Looking Statements

Forward-looking statements notice

Certain statements contained herein constitute "forward-looking statements" under the federal securities laws, including as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events, and use words such as “may,” “will,” “could,” “should,” “would,” “anticipate,” “intend,” “estimate,” “project,” “plan,” “believe,” “expect,” “target,” "prospects,” “potential,” "commit” and "forecast,” or words of similar import or meaning or refer to future time periods. Forward-looking statements may relate to, among other things: our brand and reputation; the demand for our products and services, including as a result of macroeconomic conditions and changing customer preferences and expectations; net sales growth; comparable sales; the effects of competition; implementation of interconnected retail, store, supply chain, technology, innovation and other strategic initiatives, including with respect to real estate; inventory, on-shelf availability, and in-stock positions; the state of the economy; the state of the housing and home improvement markets; the state of the credit markets, including mortgages, home equity loans, and consumer and trade credit; the impact of tariffs; trade policy changes or restrictions, or international trade disputes and efforts and ability to continue to diversify our supply chain; issues related to the payment methods we accept; demand for credit offerings including trade credit; management of relationships with our associates, jobseekers, suppliers and service providers; cost and availability of labor; costs of fuel and other energy sources; events that could disrupt our business, supply chain, technology infrastructure, or demand for our products and services, such as tariffs, trade policy changes or restrictions or international trade disputes, natural disasters, climate change, public health issues, cybersecurity events, labor disputes, geopolitical tensions or conflicts, military conflicts, or acts of war; our ability to maintain a safe and secure store environment; our ability to address expectations regarding sustainability and human capital management matters and meet related goals; continuation or suspension of share repurchases; net earnings and margin performance; earnings per share; future dividends; capital allocation and expenditures; productivity; liquidity; return on invested capital; expense and debt leverage; changes in interest rates; changes in foreign currency exchange rates; commodity or other price inflation and deflation; our ability to issue debt on terms and at rates acceptable to us; the impact and expected outcome of investigations, inquiries, claims, and litigation, including compliance with related settlements; the challenges of operating in international markets; the adequacy of insurance coverage; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of legal and regulatory changes, including executive orders and other administrative or legislative actions, such as changes to tax laws and regulations; store openings and closures; financial outlook, including guidance for fiscal 2026; and the impact of acquired companies, including SRS and GMS, on our organization and the ability to recognize the anticipated benefits of completed or pending acquisitions.

Forward-looking statements notice

These statements are not guarantees of future performance and are subject to future events, risks and uncertainties - many of which are beyond our control, dependent on the actions of third parties, or currently unknown to us - as well as potentially inaccurate assumptions that could cause actual results to differ materially from our historical experience and our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Part I, Item 1A. "Risk Factors," and elsewhere in our Annual Report on Form 10-K for our fiscal year ended February 2, 2025 and also as described from time to time in reports subsequently filed with the Securities and Exchange Commission. There also may be other factors that we cannot anticipate or that are not described herein, generally because we do not currently perceive them to be material. Such factors could cause results to differ materially from our expectations. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our filings with the Securities and Exchange Commission and in our other public statements.

Non-GAAP Financial Measures

To provide additional transparency, we supplement our disclosure with certain non-GAAP financial measures. When used in conjunction with our GAAP financial measures, we believe these supplemental non-GAAP financial measures will help management and investors to better understand and analyze our performance. However, this supplemental information should not be considered in isolation or as a substitute for the related GAAP measures. Refer to the end of this release for an explanation and definitions of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures.

For more information, contact:

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

	Three Months Ended				Fiscal Year Ended
in millions, except per share data	February 1, 2026	February 2, 2025	% Change		February 1, 2026	February 2, 2025	% Change
Net sales	$38,198	$39,704	(3.8)%		$164,683	$159,514	3.2%
Cost of sales	25,732	26,670	(3.5)		109,818	106,206	3.4
Gross profit	12,466	13,034	(4.4)		54,865	53,308	2.9
Operating expenses:
Selling, general and administrative	7,772	7,725	0.6		30,702	28,748	6.8
Depreciation and amortization	845	814	3.8		3,273	3,034	7.9
Total operating expenses	8,617	8,539	0.9		33,975	31,782	6.9
Operating income	3,849	4,495	(14.4)		20,890	21,526	(3.0)
Interest and other (income) expense:
Interest income and other, net	(43)	(30)	43.3		(124)	(201)	(38.3)
Interest expense	594	638	(6.9)		2,412	2,321	3.9
Interest and other, net	551	608	(9.4)		2,288	2,120	7.9
Earnings before provision for income taxes	3,298	3,887	(15.2)		18,602	19,406	(4.1)
Provision for income taxes	727	890	(18.3)		4,446	4,600	(3.3)
Net earnings	$2,571	$2,997	(14.2)%		$14,156	$14,806	(4.4)%
Basic weighted average common shares	993	991	0.2%		993	990	0.3%
Basic earnings per share	$2.59	$3.02	(14.2)		$14.26	$14.96	(4.7)
Diluted weighted average common shares	995	994	0.1%		995	993	0.2%
Diluted earnings per share	$2.58	$3.02	(14.6)		$14.23	$14.91	(4.6)
	Three Months Ended				Fiscal Year Ended
Selected sales data:	February 1, 2026	February 2, 2025	% Change		February 1, 2026	February 2, 2025	% Change
Comparable sales (% change)	0.4%	0.8%		N/A	0.3%	(1.8)%		N/A
Comparable customer transactions (% change)	(1.6)%	0.6%		N/A	(1.0)%	(1.0)%		N/A
Comparable average ticket (% change)	2.4%	0.2%		N/A	1.4%	(0.9)%		N/A
Customer transactions (in millions)	366.5	400.4	(8.5)%		1,601.5	1,637.2	(2.2)%
Average ticket	$91.28	$89.11	2.4		$90.56	$89.31	1.4

(1)Three months ended February 1, 2026 includes 13 weeks. Three months ended February 2, 2025 includes 14 weeks.

(2)Fiscal year ended February 1, 2026 includes 52 weeks. Fiscal year ended February 2, 2025 includes 53 weeks.

(3)Customer transactions and average ticket measures do not include results from HD Supply or SRS (including GMS).

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

in millions	February 1, 2026	February 2, 2025
Assets
Current assets:
Cash and cash equivalents	$1,389	$1,659
Receivables, net	5,597	4,903
Merchandise inventories	25,817	23,451
Other current assets	1,588	1,670
Total current assets	34,391	31,683
Net property and equipment	28,021	26,702
Operating lease right-of-use assets	9,204	8,592
Goodwill	22,344	19,475
Intangible assets, net	10,329	8,983
Other assets	806	684
Total assets	$105,095	$96,119
Liabilities and Stockholders' Equity
Current liabilities:
Short-term debt	$4,464	$316
Accounts payable	11,491	11,938
Accrued salaries and related expenses	2,529	2,315
Current installments of long-term debt	4,967	4,582
Current operating lease liabilities	1,418	1,274
Other current liabilities	7,555	8,236
Total current liabilities	32,424	28,661
Long-term debt, excluding current installments	46,341	48,485
Long-term operating lease liabilities	8,160	7,633
Other long-term liabilities	5,357	4,700
Total liabilities	92,282	89,479
Total stockholders’ equity	12,813	6,640
Total liabilities and stockholders’ equity	$105,095	$96,119

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Fiscal Year Ended
in millions	February 1, 2026	February 2, 2025
Cash Flows from Operating Activities:
Net earnings	$14,156	$14,806
Reconciliation of net earnings to net cash provided by operating activities:
Depreciation and amortization, excluding amortization of intangible assets	3,514	3,336
Intangible asset amortization	607	425
Stock-based compensation expense	522	442
Changes in working capital	(3,084)	679
Changes in deferred income taxes	418	15
Other operating activities	192	107
Net cash provided by operating activities	16,325	19,810
Cash Flows from Investing Activities:
Capital expenditures	(3,679)	(3,485)
Payments for businesses acquired, net	(5,410)	(17,644)
Other investing activities	109	98
Net cash used in investing activities	(8,980)	(21,031)
Cash Flows from Financing Activities:
Proceeds from short-term debt, net	4,148	316
Proceeds from long-term debt, net of discounts	2,161	10,010
Repayments of long-term debt	(5,040)	(1,536)
Repurchases of common stock	-	(649)
Proceeds from sales of common stock	314	395
Cash dividends	(9,152)	(8,929)
Other financing activities	(145)	(301)
Net cash used in financing activities	(7,714)	(694)
Change in cash and cash equivalents	(369)	(1,915)
Effect of exchange rate changes on cash and cash equivalents	99	(186)
Cash and cash equivalents at beginning of period	1,659	3,760
Cash and cash equivalents at end of period	$1,389	$1,659

(1)Fiscal year ended February 1, 2026 includes 52 weeks. Fiscal year ended February 2, 2025 includes 53 weeks.

NON-GAAP FINANCIAL MEASURES

Adjusted operating income, adjusted operating margin (calculated as adjusted operating income divided by total net sales), and adjusted diluted earnings per share are presented as supplemental financial measures in the evaluation of our business that are not required by or presented in accordance with GAAP. The Company excludes the impact of amortization expense from acquired intangible assets from adjusted operating income and adjusted operating margin, and the impact of amortization expense from acquired intangible assets, including the related tax effects, from adjusted diluted earnings per share. We do not adjust for the revenue that is generated in part from the use of our acquired intangible assets. Amortization expense, unlike the related revenue, is not affected by operations in any particular period unless an intangible asset becomes impaired, or the useful life of an intangible asset is revised.

When used in conjunction with our GAAP results, we believe these non-GAAP measures provide investors with meaningful supplemental measures of our performance period to period, make it easier for investors to compare our underlying business performance to peers, and align to how management analyzes trends and evaluates performance internally. The Company provides non-GAAP financial information on this basis to facilitate comparability when we report earnings results. These non-GAAP measures should not be considered in isolation or as a substitute for their comparable GAAP financial measures. Investors should rely primarily on our GAAP results and use non-GAAP financial measures only supplementally in making investment decisions. Our calculation of non-GAAP measures may not be comparable to similarly titled measures reported by other companies and other companies may not define these non-GAAP financial measures in the same way, which may limit their usefulness as comparative measures.

RECONCILIATION OF ADJUSTED OPERATING INCOME AND ADJUSTED OPERATING MARGIN

	Three Months Ended			Fiscal Year Ended
USD in millions	February 1, 2026	February 2, 2025	% Change	February 1, 2026	February 2, 2025	% Change
Operating income (GAAP)	$3,849	$4,495	(14.4)%	$20,890	$21,526	(3.0)%
Operating margin	10.1%	11.3%		12.7%	13.5%
Acquired intangible asset amortization	171	145		607	425
Adjusted operating income (Non-GAAP)	$4,020	$4,640	(13.4)%	$21,497	$21,951	(2.1)%
Adjusted operating margin (Non-GAAP)	10.5%	11.7%		13.1%	13.8%

(1) Three months ended February 1, 2026 and February 2, 2025 includes 13 and 14 weeks, respectively.

(2) Fiscal year ended February 1, 2026 and February 2, 2025 includes 52 and 53 weeks, respectively.

(3) Operating margin is calculated as operating income divided by total net sales.

(4) Amounts include acquired intangible asset amortization of $118 million and $398 million during the three and twelve months ended February 1, 2026, respectively, and $93 million and $218 million during the three and twelve months ended February 2, 2025, respectively, related to SRS Distribution, Inc., and its subsidiaries.

(5) Adjusted operating margin is calculated as adjusted operating income divided by total net sales.

Our adjusted operating margin guidance for fiscal 2026 excludes an expected approximately 40 basis point impact from acquired intangible asset amortization.

RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE

	Three Months Ended			Fiscal Year Ended
per share amounts	February 1, 2026	February 2, 2025	% Change	February 1, 2026	February 2, 2025	% Change
Diluted earnings per share (GAAP)	$2.58	$3.02	(14.6)%	$14.23	$14.91	(4.6)%
Impact of acquired intangible asset amortization	0.17	0.14		0.61	0.43
Income tax impact of non-GAAP adjustment	(0.03)	(0.03)		(0.15)	(0.10)
Adjusted diluted earnings per share (Non-GAAP)	$2.72	$3.13	(13.1)%	$14.69	$15.24	(3.6)%

(1) Three months ended February 1, 2026 and February 2, 2025 includes 13 and 14 weeks, respectively. The 14th week of the fourth quarter of fiscal 2024 increased adjusted diluted earnings per share by approximately $0.30.

(2) Fiscal year ended February 1, 2026 and February 2, 2025 includes 52 and 53 weeks, respectively. The 53rd week of fiscal 2024 increased adjusted diluted earnings per share by approximately $0.30.

(3) Calculated as the per share impact of acquired intangible asset amortization multiplied by the Company’s effective tax rate for the period.

Our adjusted diluted earnings per share guidance for fiscal 2026 excludes an expected after-tax impact of approximately $0.50 from acquired intangible asset amortization.

Contacts
Financial Community · Isabel Janci · Vice President of Investor Relations and Treasurer · 770-384-2666 · isabel_janci@homedepot.com
News Media · Sara Gorman · Senior Director of Corporate Communications · 770-384-2852 · sara_gorman@homedepot.com