Slides
Page 1
2025 INVESTOR AND ANALYST CONFERENCE TED DECKER 1 CHAIR, PRESIDENT & CEO
Page 2
2 MASSIVE MARKET OPPORUNITY CULTURE AND VALUES DISTINCT COMPETITIVE ADVANTAGES STRATEGY Winning Formula ~$1.1T TOTAL ADDRESSABLE MARKET $900B+ REMAINING OPPORTUNITY BRAND SCALE PREMIER REAL ESTATE ASSOCIATES & CULTURE SUPPLY CHAIN DIGITAL & INTERCONNECTED PRODUCT AUTHORITY PRO DELIVER A FRICTIONLESS INTERCONNECTED EXPERIENCE WIN THE PRO DRIVE OUR CORE AND CULTURE
Page 3
3 TOTAL ADDRESSABLE MARKET MARKET SHARE Large and Highly Fragmented Market CONSUMER ~$500B PRO ~$600B ~$1.1T TOTAL ADDRESSABLE MARKET THE HOME DEPOT TOTAL MARKET SHARE ~15% Source: Home Improvement Research Institute, John Burns Research & Consulting, American Rental Association, and Internal Research & Analysis
Page 4
4 Distinct Competitive Advantages ASSOCIATES & CULTURE DIGITAL & INTERCONNECTED SCALE PREMIER REAL ESTATE PRODUCT AUTHORITY BRAND SUPPLY CHAIN PRO
Page 5
5 DRIVE OUR CORE AND CULTURE DELIVER FRICTIONLESS INTERCONNECTED CUSTOMER EXPERIENCE WIN THE PRO Our Strategy
Page 6
6 Drive Our Core and Culture CUSTOMER SERVICE CULTURE PRODUCT AUTHORITY AND VALUE
Page 7
7 FRICTIONLESS CUSTOMER EXPERIENCE ACROSS CHANNELS POWERFUL ECOMMERCE SITE UNMATCHED DELIVERY CAPABILITIES Best Interconnected Experience
Page 8
Win the Pro 8 Our Target Pro Includes Multiple Customer Types, Supported Across Purchase Occasions and Platforms IN-STORE SIMPLECOMPLEX SIMPLECOMPLEX ILLUSTRATIVE SMALL / MED REPAIR & REMODELER CROSS-CATEGORY PRO SPECIALTY TRADES MRO MED / LARGESMALL / MEDCUSTOMER TYPE PURCHASE OCCASION THD PLATFORM MED / LARGE RENOVATOR & REMODELER SINGLE-FAMILY CUSTOM BUILDER SINGLE-FAMILY TRACT BUILDER ROOFING POOL INSULATION LANDSCAPE WALLBOARD OTHER MULTI-FAMILY HOSPITALITY EXTENDED LIVING Note: Pro purchase occasion spend is illustrative and not representative of Home Depot share; SRS Distribution includes SRS B uilding Products, Heritage, and GMS; SRS Distribution extension into serving the Cross -Category Pro reflects post-acquisition opportunity to bring different capabilities to these customers
Page 9
9 Technology and AI Enable Our Growth HUNDREDS OF AI APPLICATIONS ACROSS VARIOUS BUSINESS FUNCTIONS STORE OPERATIONS PRO MARKETING CUSTOMER EXPERIENCE ONLINE SALES FINANCE MERCHANDISING HUMAN RESOURCES SUPPLY CHAIN IMPROVE CUSTOMER EXPERIENCE PRODUCTIVITY AND EFFICIENCY DRIVE GROWTH PRODUCTIVITY AND EFFICIENCY
Page 10
10 The Home Depot’s Investment Proposition LARGE AND HIGHLY FRAGMENTED ~$1.1T TOTAL ADDRESSABLE MARKET WELL POSITIONED TO GROW SHARE THROUGH OUR DISTINCT COMPETITIVE ADVANTAGES AND OPERATIONAL EXCELLENCE WE HAVE A CLEAR GROWTH STRATEGY INVESTMENTS ACROSS THE BUSINESS ENHANCE OUR UNIQUE VALUE PROPOSITION
Page 11
2025 INVESTOR AND ANALYST CONFERENCE ANN-MARIE CAMPBELL SENIOR EXECUTIVE VICE PRESIDENT 11
Page 12
The Power of The Home Depot Store Network We Are the #1 Home Improvement Retailer in the U.S., Canada, and Mexico 2,350+ STORES ACROSS NORTH AMERICA ASSOCIATES ACROSS NORTH AMERICA ~470K AVERAGE STORE MANAGER TENURE 17+ YEARS 1.6B+ TOTAL TRANSACTIONS 240M+ SELLING SQUARE FOOTAGE ~90% OF STORES ARE OWNED 12Note: The average store manager tenure represents U.S. store manager leadership.
Page 13
13 The Power of Core and Culture OUR CORE MISSION: DRIVING A CULTURE OF SELLING AND SERVICE, AND DELIVERING THE BEST CUSTOMER EXPERIENCE WITH ASSOCIATES THAT HAVE PASSION, KNOWLEDGE, AND EXPERTISE
Page 14
SAFE & SECURE ENVIRONMENT CULTURE OF SELLING & SERVICE TRAINING & DEVELOPMENT CERTIFICATIONS JOB TOOLS WAGE INVESTMENTS 14 Cultivating the Best Associate Experience Our Highly Engaged Associates Provide Superior Customer Service
Page 15
15 Driving a Culture of Selling SHIFT ASSOCIATE TASKING TO MET EMPOWER ASSOCIATES WITH TRAINING & TOOLS FOCUS ON THE CULTURE OF SELLING
Page 16
16 Leveraging Technology Across the Store TECHNOLOGY ENHANCEMENTS IN-STOCK AND ON-SHELF AVAILABILITY ARE AT ALL-TIME HIGHS IN-STOCK ON-SHELF SIDEKICK APPLICATION COMPUTER VISION
Page 17
Win the Pro 17 All Pros Shop Our Stores ILLUSTRATIVE CROSS-CATEGORY PRO SPECIALTY TRADES MRO MED / LARGESMALL / MEDCUSTOMER TYPE PURCHASE OCCASION THD PLATFORM SMALL / MED REPAIR & REMODELER MED / LARGE RENOVATOR & REMODELER SINGLE-FAMILY CUSTOM BUILDER SINGLE-FAMILY TRACT BUILDER ROOFING POOL INSULATION LANDSCAPE WALLBOARD OTHER MULTI-FAMILY HOSPITALITY EXTENDED LIVING SIMPLECOMPLEXSIMPLECOMPLEX IN-STORE Note: Pro purchase occasion spend is illustrative and not representative of Home Depot share; SRS Distribution includes SRS B uilding Products, Heritage, and GMS; SRS Distribution extension into serving the Cross -Category Pro reflects post-acquisition opportunity to bring different capabilities to these customers
Page 18
18 RIGHT PRODUCTS, RIGHT BRANDS UNIFIED PRO TEAM SERVICE AND SUPPORT Investing in a Premier In-Store Pro Experience
Page 19
19 ASSORTMENT DEPTH AND BREADTH ONE PAINT FULFILLMENT OPTIONS Driving the Best Interconnected Experience In-Store Buy Online Pickup In-Store Job Site Delivery Vendor Delivery Pro Paint Sales Have More Than Doubled Since 2019
Page 20
20 Serving Our Communities VETERAN CAUSES DISASTER RECOVERY PATH TO PRO
Page 21
2025 INVESTOR AND ANALYST CONFERENCE BILLY BASTEK EXECUTIVE VICE PRESIDENT MERCHANDISING 21
Page 22
Merchandising Objectives 22 MAINTAIN OUR PRODUCT AUTHORITY DRIVE GROWTH WITH LEADING BRANDS AND INNOVATION MERCHANDISING EXCELLENCE
Page 23
Product Authority in Home Improvement 23 PRODUCT INNOVATION & VALUE COMPLETE PROJECT OFFERINGS CUSTOMER EXPERIENCE POWERED BY OUR PARTNERSHIPS AND CUSTOMER-BACK INVESTMENTS PRODUCT IS KING
Page 24
24 EXCLUSIVE KILZ PARTNERSHIP FIRST-TO-MARKET INNOVATION PREMIER BATTERY PLATFORMS MAKE ONE RUN & YOU’RE DONE SELECT FROM A RANGE OF COMMON WATTAGES IN A SINGLE BULB MATCH THE BULBS IN YOUR HOME TODAY WITH A CLICK OF A SWITCH. IT’S THAT EASY . VAST MAJORITY OF BATTERY PLATFORMS ARE REPRESENTED IN OUR ASSORTMENT ~75% OF BATTERIES ARE WITH BRANDS EXCLUSIVE TO THE HOME DEPOT IN BIG BOX RETAIL Innovation Powering Growth
Page 25
25 HARDLINES DECOR BUILDING MATERIALS Strategic Vendor Partnerships Drive Exclusivity
Page 26
Vendor Relationships Create Differentiated Experiences 26 Driving Over 500bps of Sales Lift with Rheem Water Heaters PREVIOUSLY, ONLY ~25 SKUS AVAILABLE FOR DELIVERY FROM STORE TODAY | 100+ SKUs AVAILABLE FOR SAME OR NEXT-DAY DELIVERY FROM VARIOUS LOCATIONS EXAMPLE:
Page 27
Vendors Aligning with HD for Future Growth PRO 27
Page 28
28 Our Private Brands Provide Differentiated Value
Page 29
29 PRODUCT AND INNOVATION ASSORTMENT AND SPACE PLANNING DATA AND AI Balancing the Art and Science We Continue to Invest in People, Processes, and Technology to Optimize Our Business
Page 30
30 RECORD IN-STOCKS DEDICATED MET TASKING GREATER CONNECTIVITY MERCHANT EXPERTISE Merchandising Excellence is a Competitive Advantage
Page 31
31 #1 Brand in Home Improvement
Page 32
32 We Are the Product Authority in Home Improvement HOME IMPROVEMENT PRODUCT AUTHORITY IN
Page 33
2025 INVESTOR AND ANALYST CONFERENCE JORDAN BROGGI EXECUTIVE VICE PRESIDENT CUSTOMER EXPERIENCE & PRESIDENT | ONLINE 33
Page 34
34 POWERFUL ECOMMERCE SITE UNMATCHED DELIVERY CAPABILITIES FRICTIONLESS CUSTOMER EXPERIENCE ACROSS CHANNELS ~$25B ANNUAL ONLINE SALES ~16K DELIVERY ASSETS 6B+ WEBSITE AND STORE VISITS ANNUALLY Best Interconnected Experience
Page 35
35 Millions of Customer Journeys Across Our Physical and Digital Assets Interconnected Includes the Entire Shopping Journey POST-SALE SUPPORT IN-STORE, CALL CENTER, SELF SERVICE FULFILL FROM STORE/DC/VENDOR TO HOME/JOBSITE/ STORE PHYSICAL RESEARCH IN-STORE (+STORE MODE IN-APP) DIGITAL RESEARCH APP, DESKTOP, MOBILE WEB PURCHASE ONLINE & IN-STORE, PARCEL, BIG & BULKY
Page 36
Unmatched Delivery Network 36 U.S. LAST MILE DISTRIBUTION FDC PRO FLATBED 17 DFC PARCEL / BIG & BULKY 20 MDO CROSS-DOCK 160 STORES / BRANCHES 2,350+ HOME DEPOT STORES 1,200+ SRS BRANCHES HD SUPPLY FACILITIES~120 Facility Type Distribution Facilities Stores
Page 37
Supply Chain Assets + Technology = Faster Speeds 37 OVER HALF Of Deliveries are Same or Next Day 3x+ Increase from 2022 For In-Stock SKUs, We Will Continue to Optimize Fulfillment Across All Assets to Better Serve Our Customers VANPARCEL CAR BOX FLATBED INCREASED DELIVERY SPEED ACROSS PRODUCT TYPES AND DELIVERY MODES 3X+ INCREASE FROM 2022 55%+ OF DELIVERIES ARE SAME OR NEXT-DAY FOR IN-STOCK SKUS,
Page 38
Best-in-Class Delivery Experience 38 AVAILABILITY COMMUNICATION SPEED RELIABILITY ABC1234567 Customer Satisfaction for Pro Deliveries at All-Time Highs
Page 39
Tech Enablement Driving Personalization MAGIC APRON REFRESHED CUSTOMER CHAT IMPROVED SEARCH FUNCTION AI POWERED PROJECT LISTS 39
Page 40
IN-STORE ONLY IN-STORE & ONLINE IN-STORE, ONLINE & FAST DELIVERY IN-STORE, ONLINE, FAST DELIVERY & UTILIZING NEW SUPPLY CHAIN ASSETS 40 Driving Greater Engagement CUSTOMER SPEND INCREASES WITH CHANNEL AND CAPABILITY UTILIZATION
Page 41
Relentless Focus on Enhancing Customer Experience 41 AI-ENABLED TECHNOLOGY IMPROVED DELIVERY EXPERIENCE ONLINE PRODUCT AUTHORITY MOBILE APP EXPERIENCE
Page 42
2025 INVESTOR AND ANALYST CONFERENCE EXECUTIVE VICE PRESIDENT PRO 42 MIKE ROWE
Page 43
We Are the Destination for Pros 43 PRO CUSTOMERS 9M+ THD STORES 2,350+ SRS BRANCHES 1,200+
Page 44
Win the Pro 44 Our Target Pro Includes Multiple Customer Types, Supported Across Purchase Occasions and Platforms SIMPLECOMPLEX ILLUSTRATIVE CROSS-CATEGORY PRO SPECIALTY TRADES MRO CUSTOMER TYPE PURCHASE OCCASION THD PLATFORM SMALL / MED REPAIR & REMODELER MED / LARGE RENOVATOR & REMODELER SINGLE-FAMILY CUSTOM BUILDER SINGLE-FAMILY TRACT BUILDER ROOFING POOL INSULATION LANDSCAPE WALLBOARD OTHER MULTI-FAMILY HOSPITALITY EXTENDED LIVING SIMPLE IN-STORE COMPLEX Note: Pro purchase occasion spend is illustrative and not representative of Home Depot share; SRS Distribution includes SRS B uilding Products, Heritage, and GMS; SRS Distribution extension into serving the Cross -Category Pro reflects post-acquisition opportunity to bring different capabilities to these customers MED / LARGESMALL / MED
Page 45
Pro Total Addressable Market 45 THE HOME DEPOT MARKET SHARE ~$600B PRO TOTAL ADDRESSABLE MARKET ~15% ~50% OF THE ADDRESSABLE MARKET OPPORTUNITY REPRESENTS PROS WORKING ON COMPLEX PROJECTS Source: Home Improvement Research Institute, John Burns Real Estate Consulting, American Rental Association, and Internal Research & Analysis
Page 46
Streamlined Communication / Sales Relationships Our Unique Pro Value Proposition 46 TODAY: PROS RELY ON 30+ SUPPLIERS FOR A JOB FUTURE VISION: THD TO SERVE AS ONE PREFERRED PARTNER FOR THE WHOLE PROJECT Our Vision: A Unified, Cross-Category Experience That Saves Pros Time and Money STREAMLINED COMMUNICATION SINGLE POINT-OF-CONTACT SIMPLIFIED ORDERING ONE WEBSITE TO NAVIGATE COMPLEX PROJECT SUPPORT COORDINATED & STAGED DELIVERIES ORGANIZED INVOICING SIMPLE PAYMENT PROCESS CONVENIENT LOCATIONS EXTENDED HOURS TO SUPPORT URGENT NEEDSSPECIALTY PAINT STORE MILLWORK SUPPLY GYPSUM SUPPLY APPLIANCE DEALER LUMBERYARD PLUMBING SUPPLY ELECTRICAL SUPPLY HVAC SUPPLY FLOORING DEALER CABINET SHOP COUNTERTOP FABRICATOR LIGHTING GALLERY BIG-BOX RETAIL
Page 47
Pro Ecosystem ASSORTMENT DEPTH & BREADTH BRANDS TRADE CREDIT RENTAL ORDER MANAGEMENT CONVENIENT LOCATIONS PREFERRED PRICING DIGITAL & B2B EXPERIENCELOYALTY PROGRAM SHOWROOMS SALES FORCE PRO DELIVERY 47
Page 48
Incremental Capabilities to Win the Pro 48 ASSORTMENT DEPTH & BREADTH BRANDS TRADE CREDIT DELIVERY RENTAL ORDER MANAGEMENT CONVENIENT LOCATIONS PREFERRED PRICING DIGITAL & B2B EXPERIENCELOYALTY PROGRAM SHOWROOMS SALES FORCE PRO SALES FORCE DELIVERY TRADE CREDIT ORDER MANAGEMENT PREFERRED PRICING DIGITAL & B2B EXPERIENCE
Page 49
Expanding Delivery Through Relay Markets 49 …THAT EXPAND OUR REACH AND IMPROVE THE CUSTOMER DELIVERY EXPERIENCE WE CONTINUE TO INCREASE FDC COVERAGE AND ARE TESTING NEW CAPABILITIES… FDC RELAY EXAMPLE: ATLANTA TO CHATTANOOGA WITH FDC RELAY, WE ARE NOW ABLE TO SERVICE CHATTANOOGA FROM OUR ATLANTA FDC THD STORE ATLANTA FDC CHATTANOOGA EXISTING FDC COVERAGE ADDITIONAL RELAY COVERAGE LARGER QUANTITY OF PRODUCT / STOPS AVAILABLE PER TRUCK HIGHER PERCENTAGE OF ON-TIME FLATBED DELIVERIES EXTENDED FDC COVERAGE TO SERVE NEW MARKETS EXPANDED FDC COVERAGE WITHIN EXISTING MARKETS
Page 50
DELIVERY FULFILLMENT LOCATIONS 2,500+ DELIVERED SALES UP ~40% We Are Winning Today Double-Digit Billion Dollar Opportunity PRO SALES RESOURCES 1,500+ GROWING SHARE AND DRIVING HIGHER SALES PROS ON THD TRADE CREDIT 7K+ ON AVERAGE, INCREASING SPEND ~30% 50
Page 51
Winning Faster Together SHARED VISION 3M+ PRODUCTS OFFERED PRODUCT AUTHORITY 2.3K+ STORE LOCATIONS STORE FOOTPRINT ~200 CORE DCs DELIVERY NETWORK ASSORTMENT TO HELP SPECIALTY CONTRACTORS SPECIALIZED ASSORTMENT 1.2K+ BRANCH LOCATIONS BRANCH NETWORK 3.5K+ SALES RESOURCES LOCALIZED SALESFORCE 8K+ PRIVATE FLEET ASSETS PRIVATIZED FLEET WIN WITH MULTIPLE PROS ACROSS MULTIPLE PURCHASE OCCASIONS DELIVERY FLEET 5K+ FLEET ASSETS 51
Page 52
Serving the Pro 52
Page 53
2025 INVESTOR AND ANALYST CONFERENCE 53 SRS - PRESIDENT & CEO DAN TINKER
Page 54
SIZE AND SCALE SRS Distribution – Competitive Advantages 54 ECOSYSTEM AND CAPABILITIES FACTORS FUELING SRS GROWTH ACQUISITION EXPERTISE DIFFERENTIATED CAPABILITIES ACCESS TO ENTERPRISE RESOURCES 1,200+ BRANCH LOCATIONS 18,000+ ASSOCIATES SIZE AND SCALE TECHNOLOGY AND DIGITAL LEADERSHIP VENDOR AND CUSTOMER RELATIONSHIPS 8,000+ DELIVERY ASSETS PEOPLE-FIRST CULTURE
Page 55
MED / LARGESMALL / MED Win the Pro 55 ILLUSTRATIVE CROSS-CATEGORY PRO SPECIALTY TRADES MRO CUSTOMER TYPE PURCHASE OCCASION THD PLATFORM SMALL / MED REPAIR & REMODELER MED / LARGE RENOVATOR & REMODELER SINGLE-FAMILY CUSTOM BUILDER SINGLE-FAMILY TRACT BUILDER ROOFING POOL INSULATION LANDSCAPE WALLBOARD OTHER MULTI-FAMILY HOSPITALITY EXTENDED LIVING IN-STORE SIMPLECOMPLEX SIMPLECOMPLEX Note: Pro purchase occasion spend is illustrative and not representative of Home Depot share; SRS Distribution includes SRS B uilding Products, Heritage, and GMS; SRS Distribution extension into serving the Cross -Category Pro reflects post-acquisition opportunity to bring different capabilities to these customers SRS Serves Specialty Trade Customers Spanning Residential and Commercial Markets
Page 56
56 SRS Distribution – Verticals ROOFING AND EXTERIOR BUILDING PRODUCTS ENTERED IN 2008 OUTDOOR LIVING ENTERED IN 2019 INTERIOR BUILDING PRODUCTS ENTERED IN 2025 Leadership Position Across Verticals
Page 57
57 SRS Growth Strategy CONSISTENT SAME STORE SALES GROWTH 38 OPENINGS SINCE THD ACQUISITION 17 NEW ACQUISITIONS SINCE THD ACQUISITION INTEGRATED ERP AND IT SYSTEMS SAME STORE SALES NEW GREENFIELD LOCATIONS DIGITAL SOLUTIONS STRATEGIC M&A ACTIVITY
Page 58
58 Winning Faster Together SHARED VISION 3M+ PRODUCTS OFFERED PRODUCT AUTHORITY 2.3K+ STORE LOCATIONS STORE FOOTPRINT ~200 CORE DCs DELIVERY NETWORK ASSORTMENT TO HELP SPECIALTY CONTRACTORS SPECIALIZED ASSORTMENT 1.2K+ BRANCH LOCATIONS BRANCH NETWORK 3.5K+ SALES RESOURCES LOCALIZED SALESFORCE 8K+ PRIVATE FLEET ASSETS PRIVATIZED FLEET WIN WITH MULTIPLE PROS ACROSS MULTIPLE PURCHASE OCCASIONS DELIVERY FLEET 5K+ FLEET ASSETS
Page 59
59 Generating Incremental Revenue Through Cross-Selling SRS/GMS CUSTOMERS BUYING MORE FROM HOME DEPOT NATIONAL ACCOUNTS LOOKING FOR ENTERPRISE-WIDE SOLUTIONS HOME DEPOT CUSTOMERS BUYING MORE FROM SRS/GMS HOMEOWNER REFERRAL PROGRAM DRIVING SALES
Page 60
Becoming the Leader in Building Products Distribution 60
Page 61
EXECUTIVE VICE PRESIDENT & CFO 2025 INVESTOR AND ANALYST CONFERENCE RICHARD MCPHAIL
Page 62
Reaffirm Fiscal 2025 Guidance 62 FY 2025 TOTAL SALES GROWTH ~ 3% COMP SALES GROWTH SLIGHTLY POSITIVE GROSS MARGIN ~ 33.2% OPERATING MARGIN ~ 12.6% ADJ. OPERATING MARGIN ~ 13.0% EFFECTIVE TAX RATE ~ 24.5% NET INTEREST EXPENSE ~ $2.3B DILUTED EPS ~ -6% ADJ. DILUTED EPS ~ -5% Note: Adjusted operating margin excludes an expected approximately 40 basis point impact from acquired intangible asset amort ization. Note: Adjusted diluted EPS excludes an expected after-tax impact of approximately $0.45 from acquired intangible asset amortizat ion.
Page 63
LOCK-IN EFFECT HOUSING TURNOVER Current Housing Market Conditions TOTAL HOUSING TURNOVER: SF SAAR SALES AS % OF TOTAL HOUSING STOCK 50-Yr. Avg 4.4% 2.9% 2022 2023 2024 2025 2026 3.0% 4.0% 5.0% 2.8% 5.8% 2.6% 3.1% 6.0% 3.1% 4.0% 4.4% 2.9% 2.0% 3.0% 4.0% 5.0% 6.0% 1975 1977 1979 1981 1983 1985 1987 1989 LT Avg: 4.1% 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 PERCENTAGE OF OUTSTANDING RESIDENTIAL MORTGAGES BY INTEREST RATE Q1 ’13 Q3 ’13 Q1 ’14 Q3 ’14 Q1 ’15 Q3 ’15 Q1 ’16 Q3 ’16 Q1 ’17 Q3 ’17 Q1 ’18 Q3 ’18 Q1 ’19 Q3 ’19 Q1 ’20 Q3 ’20 Q1 ’21 Q3 ’21 Q1 ’22 Q3 ’22 Q1 ’23 Q3 ’23 Q1 ’24 Q3 ’24 Q1 ’25 >6% 5%-6% 4%-5% 3%-4% <3% ~80% OF MORTGAGES ARE BELOW 6% 63 2023 2025 Note: Total housing turnover equals SAAR SF existing home and SF new home sales over all total housing stock Sources: FHFA, Freddie Mac, Census Bureau, National Association of Realtors
Page 64
Short-Term Pressures 64 Consumer Uncertainty Building Material Costs Skilled Labor Shortages Higher Financing Costs Weak Existing Home Sales Supply Chain Issues Not Being Held Back Capacity Constraints Households Already Remodeled Increased Competition Regulatory Barriers 3Q25 2Q25 FACTORS LIMITING PROFESSIONAL REMODELERS' GROWTH OVER THE NEXT 6 MONTHS HOME PRICES REASONS FOR DEFERRING PROJECTS 10.9% 4.1% 6.2% 20.7% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Sep. ‘25 1.3% CASE-SHILLER NATIONAL HOME PRICE INDEX YOY % Sources: S&P Cotality Case-Shiller, John Burns Research & Consulting
Page 65
Preliminary 2026 Outlook 65 FY 2026 MARKET GROWTH ~ -1% to ~ +1% COMP SALES GROWTH ~ 0% to ~ 2% TOTAL SALES GROWTH ~ 2.5% to ~ 4.5% OPERATING MARGIN ~ 12.6% at 2% Comp ADJ. OPERATING MARGIN ~ 13.0% at 2% Comp DILUTED EPS ~ 4% at 2% Comp ADJ. DILUTED EPS ~ 4% at 2% Comp Note: Adjusted operating margin excludes an expected approximately 40 basis point impact from acquired intangible asset amort ization. Note: Adjusted diluted EPS excludes an expected after-tax impact of approximately $0.50 from acquired intangible asset amortizat ion.
Page 66
66 Strong Long-Term Housing Fundamentals $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 TOTAL VALUE OF HOUSING STOCK (Q2 2025): ~$50T HOME EQUITY +$16T SINCE Q4 2019 (~80%) MORTGAGE DEBT ~$14T HOME EQUITY ~$36T 0% 20% 40% 60% 80% 100% 2024 2020 2016 2012 2008 2004 2000 1996 40+ YEARS 30-39 YEARS 20-29 YEARS 10-19 YEARS 0-9 YEARS TODAY: 55% OF HOMES ARE 40+ YEARS OLD VALUE OF HOUSING STOCK AGE OF HOUSING STOCK MORTGAGE DEBT ($T) 2011: 42% OF HOMES WERE 40+ YEARS OLD HOME EQUITY ($T) Sources: Federal Reserve Board of Governors, Census Bureau
Page 67
CURRENT SHORTAGE(1) FORECASTED HOUSEHOLD FORMATION + NEW HOME/TEARDOWNS 10 YR. TOTAL HOMES NEEDED TOTAL HOMES NEEDED PER YEAR TOTAL # OF HOMES ~ 2M – 5M 12M – 14M 14M – 19M 1.4M – 1.9M HOUSING UNITS NEEDED OVER NEXT 10 YEARS ~10% to ~45% HIGHER THAN 10-YR AVG. COMPLETIONS (1.3M/YEAR) HOUSING SHORTAGE PENT-UP DEMAND 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 HOME IMPROVEMENT DEFERRAL ESTIMATE $22B OF PENT-UP DEMAND CREATED OVER LAST 2 YEARS (JOHN BURNS RESEARCH & CONSULTING) Quarters After Covid Hit (1Q2020 = 0) Fundamentals Supporting Future Demand Billions ($) 67Sources: John Burns Research & Consulting, Census Bureau, (1) Based on estimates from CBRE, Apollo, Zillow, NAR, And McKinsey
Page 68
68 Investing for Future Growth CAPITAL EXPENDITURES INVESTMENT PRIORITIES 1.9% 2.3% 2.4% 1.7% 2.0% 2.1% 2.2% 2.5% FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 1.9% CAPEX $ % OF SALES DRIVING THE CORE INTERCONNECTED WIN THE PRO FY2024 FY2025F
Page 69
69 Generating Billions in Productivity Across the Business FREIGHT FLOW MANAGEMENT SUPPLY CHAIN OPTIMIZATION STREAMLINE CENTRAL PROCESSES
Page 70
Market Recovery Case 70 RECOVERY CASE ACCELERATED RECOVERY CASE TOTAL SALES GROWTH ~ 5% to ~ 6% SHARPER HOUSING RECOVERY DRIVES SALES AND EPS GROWTH FASTER THAN RECOVERY CASE COMP ~ 4% to ~ 5% NON-COMP ~ 1% OPERATING PROFIT GROWTH FASTER THAN SALES EPS & ADJ. EPS GROWTH MID TO HIGH SINGLE DIGITS Note: Refer to ir.homedepot.com under "Financial Reports > Quarterly Earnings" for an explanation and definitions of these non-GAAP financial measures.
Page 71
71 Capital Allocation INVEST IN THE BUSINESS PAY THE DIVIDEND RETURN EXCESS CASH
Page 72
72 Home Depot's Investment Proposition LARGE AND HIGHLY FRAGMENTED ~$1.1T TOTAL ADDRESSABLE MARKET WELL POSITIONED TO GROW SHARE THROUGH OUR DISTINCT COMPETITIVE ADVANTAGES AND OPERATIONAL EXCELLENCE INVESTMENTS ACROSS THE BUSINESS ENHANCE OUR UNIQUE VALUE PROPOSITION CREATE SHAREHOLDER VALUE THROUGH DISCIPLINED CAPITAL ALLOCATION