Home Depot (HD) Financials

Home Depot's recent quarterly financial results and long-term trends indicate a solid performance with steady growth, alongside effective capital allocation and strong cash generation.

Over the last four years, Home Depot has consistently delivered sizable revenues with modest fluctuations, alongside healthy profitability and robust cash flows. Let’s highlight key points from the latest quarter (Q1 2025) and trends observed across recent years:

• Q1 2025 Operating Revenue was $39.9 billion, slightly up from $39.7 billion in Q4 2024, showing steady sales growth.
• Gross Profit in Q1 2025 increased to $13.46 billion from $13.03 billion in Q4 2024, indicating improved margins or volume gains.
• Net Income for Q1 2025 rose to $3.43 billion compared to $3.00 billion in Q4 2024, reflecting ongoing profitability improvement.
• Adjusted EBITDA-related expenses like Depreciation and Amortization in Q1 2025 remain consistent (~$995M combined), maintaining operational stability.
• Cash flow from operating activities was strong at $4.33 billion in Q1 2025, supporting reinvestment and financing activities.
• Capital expenditures of $806 million in Q1 2025 reflect sustained investment in property and stores.
• Dividend payments remain substantial, with $2.29 billion paid in Q1 2025, supporting shareholder returns along with a dividend per share of $2.30, up from $2.25 in Q4 2024, signaling dividend growth.
• Balance sheet remains strong with total assets growing to $99.2 billion by Q1 2025, driven by increases in inventories and property, plant & equipment, supporting sales growth.
• Debt levels are elevated with $49.2 billion long-term and $4.9 billion short-term debt at Q1 2025, which is fairly stable compared to previous quarters.
• Net cash used in financing activities increased to -$3.76 billion in Q1 2025, driven by a large dividend payout and debt repayments, potentially limiting financial flexibility in the short term.

Trend analysis from past quarters and years:

• Home Depot has steadily increased revenues from around $35 billion in late 2021 to close to $43 billion in mid-2024, demonstrating ongoing top-line growth.
• Gross profit has similarly expanded, with margins stable around 33%-35%, indicating effective cost control despite inflationary pressures.
• Net income and EPS have progressively risen, with diluted EPS growing from around $3.2 in late 2021 to over $4.6 in 2024, highlighting improving profitability trends.
• The company maintains a significant but manageable level of debt, with careful refinancing and repayment activity observed, balancing leverage and liquidity.
• Capital expenditures and acquisitions have varied quarter to quarter but reflect a commitment to strategic investments in stores and supply chain.
• Treasury stock levels have increased consistently, reflecting aggressive share repurchases historically, which decreases shareholder equity but supports EPS.
• Interest expenses have grown slightly over time, edging up to ~$615 million in Q1 2025 from ~$341 million in 2021, corresponding with increased debt load.
• Cash flow used in financing activities has been mostly negative over several quarters due to dividends and share repurchases, which may constrain liquidity.

Summary: Home Depot is exhibiting stable financial health with gradual revenue and profit growth, strong operating cash flows, and disciplined capital investments. There is a focus on shareholder returns through dividends and potential share buybacks (though none in Q1 2025). Debt levels are substantial but not unusual for the sector, and the company is actively managing its capital structure.

Retail investors can view Home Depot as a steadily growing and profitable business with consistent cash generation, balanced leverage, and shareholder-friendly policies, tempered with attention to financing cash outflows.