Home Deport Reaffirms Fiscal 2025 Guidance

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00:00I want to start on same-store sales, comparable sales. What was interesting was that it fell

00:04three-tenths of a percent in the most recent quarter, but there's quite a bit of nuance

00:08in that decline. Walk us through it. Yeah, so it was definitely an interesting

00:13quarter. Comp sales, which is a main metric that investors look at in this sector,

00:17that missed expectations and turned negative after turning positive last quarter.

00:23And in the U.S., though, that metric actually beat expectations and grew year over year.

00:28Earnings, on the other hand, also missed. But the company maintained their guidance for the full

00:33year after incorporating tariff impact and the current market conditions. So that's the bit

00:40that the market really liked. Okay, so the maintained guidance was a positive. And also

00:45the fact that same-store sales in the U.S. was positive also encouraged investors. Nevertheless,

00:50we've seen the stock give up its earlier gains. I want to get a sense from you on what Home Depot

00:55is saying about pricing, because Walmart warned that it would raise prices soon. It would have

00:59no choice but to do so, which got the president's attention. Of course, he posted on social media

01:04that Walmart should eat the tariffs. Given all that sensitivity around pricing,

01:09what is Home Depot's strategy?

01:11Yeah, so Home Depot has said it sources more than 50 percent of their items in the U.S. and that they

01:17continue to diversify their supply chain. And this morning, they shared additional color as well.

01:23They said they expect that no country outside the U.S. would represent more than 10 percent of their

01:29orders in a year from now. They also said they're expecting to generally keep their pricing where

01:35they are and that they're not expecting broad-based price increases. And they attributed a lot of that

01:42to their efforts over the years to diversify supply chain. And so that's a little bit different from what

01:50some of the other companies have said. Walmart, as you mentioned, they said during earnings last

01:54week that higher prices are going to hit store shelves soon and that they would be more pronounced

01:59as the year goes on. So, of course, it's all still very early. And we'll hear from other retailers

02:06in the coming weeks. But that's the latest from Home Depot this morning.

02:10Yeah. When it comes to Home Depot planning to continue to diversify its supply chain,

02:14can you give us a sense on how reliant it is right now on products from overseas?

02:20Yeah. So right now, more than 50 percent of their items are sourced in the U.S. So the remainder

02:27comes from overseas. And like other retailers over the years, they've tried to diversify where they

02:34get and procure the products they sell. So that's going to be a trend we see for the foreseeable future.

02:43Sure.