Home Depot — Income Statement, Cash Flows & Balance Sheet
Is Home Depot profitable?
Home Depot grows revenue but sees net earnings slip as acquisition costs and interest expense rise.
| Metric | Fiscal 2024 | Fiscal 2025 | Change |
|---|---|---|---|
| Net sales | $159,514M | $164,683M | +3.2% |
| Gross profit margin | 33.4% | 33.3% | -0.1 pp |
| Operating income | $21,526M | $20,890M | -3.0% |
| Interest expense | $2,321M | $2,412M | +3.9% |
| Net earnings | $14,806M | $14,156M | -4.4% |
| Diluted EPS | $14.91 | $14.23 | -4.6% |
Revenue grew modestly, but higher selling and administrative costs — partly driven by absorbing the GMS acquisition — along with rising interest expense on the debt used to fund acquisitions, pushed net earnings and earnings per share lower year-over-year. Gross margins held nearly steady, so the pressure came from below the gross profit line.
Amortisation of acquired intangibles is a meaningful non-cash drag on reported earnings.
| Item | Fiscal 2024 | Fiscal 2025 | Change |
|---|---|---|---|
| Intangible asset amortisation | $425M | $607M | +42.8% |
The jump in amortisation reflects a full year of SRS customer-relationship intangibles plus the addition of GMS in September 2025. This is a real GAAP cost but a non-cash one — investors weighing underlying earning power often look past it.
Where does Home Depot's revenue come from?
The core retail business was flat, with all growth coming from the newly acquired SRS distribution arm.
| Segment | Fiscal 2024 | Fiscal 2025 | Change |
|---|---|---|---|
| Primary (retail stores) | $153,108M | $151,966M | -0.7% |
| Other (SRS distribution) | $6,406M | $12,717M | +98.5% |
| Total net sales | $159,514M | $164,683M | +3.2% |
The traditional home improvement retail business actually declined slightly — reflecting a still-cautious housing and renovation environment — while the SRS segment roughly doubled due to a full year of SRS revenue plus the GMS acquisition completing in September 2025. SRS is becoming a meaningful and fast-growing piece of the overall business.
Does Home Depot generate cash?
Home Depot remains a strong cash generator, but operating cash flow fell sharply as working capital consumed more cash.
| Item | Fiscal 2024 | Fiscal 2025 | Change |
|---|---|---|---|
| Net cash from operations | $19,810M | $16,325M | -17.6% |
| Capital expenditures | $(3,485M) | $(3,679M) | +5.5% |
| Free cash flow (GAAP operating less capex) | $16,325M | $12,646M | -22.5% |
| Cash dividends paid | $(8,929M) | $(9,152M) | +2.5% |
The decline in operating cash flow is largely explained by inventory build (up over $2.3 billion, partly from GMS) and changes in payables and taxes. Free cash flow still comfortably covers the dividend, but the cushion narrowed. No shares were repurchased in fiscal 2025, with the buyback programme on pause since March 2024.
How strong is Home Depot's balance sheet?
Home Depot carries substantial debt, predominantly taken on to finance the SRS and GMS acquisitions.
| Item | Feb 2, 2025 | Feb 1, 2026 | Change |
|---|---|---|---|
| Total long-term debt (incl. current) | $53,067M | $51,308M | -3.3% |
| Short-term debt (commercial paper) | $316M | $4,464M | +$4.1B |
| Cash and equivalents | $1,659M | $1,389M | -16.3% |
| Total debt (approx.) | $53,383M | $55,772M | +4.5% |
Net debt edged higher due to GMS financing, even as long-term bonds were paid down. The spike in short-term commercial paper — used to initially fund GMS — is notable and will need to be refinanced or repaid over the near term.
Goodwill and intangibles now make up a significant share of the asset base, a legacy of the acquisition strategy.
| Item | Feb 2, 2025 | Feb 1, 2026 | Change |
|---|---|---|---|
| Goodwill | $19,475M | $22,344M | +14.7% |
| Intangible assets, net | $8,983M | $10,329M | +15.0% |
| Combined as % of total assets | 29.6% | 31.1% | +1.5 pp |
Goodwill and intangibles now represent nearly a third of total assets — a figure worth watching, since any future impairment charge would flow directly through the income statement.