Home Depot (HD) reported its Q4 2024 financial results, covering the period ending February 2, 2025, offering a mixed picture shaped by a difficult macroeconomic landscape and evolving consumer trends. While revenue showed notable growth, profitability faced slight pressure, and the company remains cautious in its outlook for the year ahead.

Net sales for the quarter reached $39.7 billion, an increase of $4.9 billion, or approximately 14% year-over-year. A portion of this growth—around $2.5 billion—was attributed to the extra week included in this fiscal year. Despite the strong top-line figure, underlying performance was more moderate. Comparable sales increased by 0.8%, with U.S. stores rising by 1.3%. Notably, sales saw a significant boost in December, while November and January recorded declines, reflecting uneven consumer demand throughout the quarter.

On the margin side, gross margin came in at approximately 32.8%, down 25 basis points from the same quarter last year. This dip was largely driven by the acquisition of SRS, which impacted product mix and cost structures. Operating income totaled $21.5 billion, translating to an operating margin of 11.3%, down from 11.9% in Q4 2023. On an adjusted basis, the operating margin was 11.7%.

Net earnings for the fiscal year were $14.8 billion, with diluted earnings per share (EPS) of $14.91, reflecting a 1.3% decline compared to the prior year. In terms of cash flow, Home Depot generated $19.8 billion in cash from operating activities, down from $21.2 billion a year earlier, suggesting some pressure on cash generation despite revenue growth.

Capital investment remained a priority, with $3.5 billion in capital expenditures for the full year, including $1.1 billion in Q4 alone. In addition, the company returned significant value to shareholders, paying out $8.9 billion in dividends throughout fiscal 2024. The quarterly dividend was increased by 2.2% to $2.30 per share, underscoring Home Depot's ongoing commitment to shareholder returns.

Management acknowledged that high interest rates continued to weigh on larger remodeling projects, but emphasized broad-based customer engagement across categories, especially in appliances and building materials. A key strategic development was the successful integration of SRS, which added $6.4 billion in sales since its acquisition, supporting Home Depot’s push into the pro customer market.

Looking ahead to fiscal 2025, the company offered a measured outlook, projecting total sales growth of approximately 2.8% and comparable sales growth of about 1%. This guidance reflects ongoing caution amid persistent economic headwinds, particularly related to housing affordability and interest rate sensitivity.

Overall, Home Depot’s Q4 2024 results highlight a company that continues to generate strong revenue while navigating margin pressures and a dynamic consumer environment. Strategic investments and acquisitions, combined with a steady return of capital, position the company for resilience in a still-uncertain market.