Home Depot and Lowe’s, two leading S&P 500 home improvement retailers, are set to release their first-quarter 2025 earnings this week amid renewed interest due to recent tariff adjustments and evolving market conditions.
Investors and analysts are closely monitoring these reports for insights on inventory levels, revenue outlooks, and the impact of U.S.-China trade policies.
Earnings Expectations and Market Context
Home Depot (HD) will report its Q1 results before the market opens Tuesday, with consensus estimates projecting adjusted earnings per share (EPS) of approximately $3.59, a slight decline of about 1.1% year-over-year. Revenue is expected to rise 8% to around $39.33 billion, partly driven by the acquisition of srs Distribution completed in mid-2024.
Comparable-store sales are forecasted to dip marginally by 0.5%, with hopes for sequential improvement in the spring season. For the full year 2025, Home Depot anticipates adjusted EPS to decline about 2% to $14.94, with sales growth near 2.8% and comparable-store sales up roughly 1%.
Lowe’s (LOW) will follow with its earnings release early Wednesday. Analysts expect Q1 EPS to decline around 6% to $2.89, with revenue estimated at approximately $21 billion, reflecting a 1-2% decrease year-over-year.
The company faces macroeconomic headwinds, including softer demand in discretionary categories and ongoing tariff pressures. Lowe’s projects 2025 total sales between $83.5 billion and $84.5 billion, with EPS guidance of $12.15 to $12.40 and flat to 1% growth in comparable-store sales.
The retailer’s exposure to global supply chains, particularly tariffs on lumber, steel, and aluminum, continues to weigh on margins and pricing strategies.
Tariff Relief and Supply Chain Dynamics
A significant development influencing these earnings is the recent U.S. tariff reduction on Chinese imports, cut from 145% to 30% for a 90-day period, which has sparked a revival in shipments from China to the U.S. This easing is expected to alleviate inventory shortages and improve consumer sentiment in the home improvement sector.
Container bookings from China have surged approximately 275-300% following the tariff cut announcement, signaling a potential rebound in supply chain activity just ahead of peak seasonal demand.
Despite this positive shift, tariffs on steel, aluminum, and Canadian lumber remain at 25%, continuing to impact costs in the construction and home improvement markets. Retailers like Walmart have noted that tariff-related price pressures are expected to affect consumers later in the year, underscoring ongoing uncertainty in the sector.
Stock Performance and Analyst Views
As of Monday’s trading, Home Depot shares were slightly down 0.4% at $379.18, while Lowe’s edged up marginally to $234.42. Both stocks have surpassed their 50-day moving averages but remain below their 200-day averages.
Year-to-date, Home Depot’s stock has gained about 5%, with Lowe’s up approximately 3.7%. Analysts maintain cautious optimism, with some highlighting Home Depot’s stronger positioning due to its scale, professional customer base, and pricing power compared to Lowe’s, which has greater reliance on the do-it-yourself segment and faces more pronounced uncertainties.
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