Home Depot not increasing prices as sales beat expectation despite tariffs

Home Depot announced it will not be increasing prices due to tariffs, as other big-box stores say they will have to raise prices. — Image credit: Jakub Porzycki/NurPhoto via Getty Images

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Summary

Tariffs impact

Walmart announced price increases on products due to tariffs on China, while Home Depot stated it would maintain its current pricing levels. Home Depot CFO Richard McPhail explained the company does not plan price hikes because it has diversified its sourcing and reduced reliance on Chinese imports.

Sales performance

Home Depot expects sales to grow by 2.8% in 2025, factoring in current tariff rates. Its first quarter revenue slightly exceeded expectations, reaching $39.86 billion compared to a projection of $39.31 billion. Sales from March 2024 to March 2025 increased by 1.3%, and from April to April by 1.8%, as reported by CFO Richard McPhail.

Competitor responses

Rival Lowe’s btold shareholders 40% of its products sold come from overseas and that tariffs would likely increase production costs. Lowe’s first quarter earnings figures and revenue outlook are pending release.

Full story

One week after Walmart announced that it would begin raising prices on products sold in U.S. stores due to President Donald Trump’s tariffs on China, big box rival Home Depot announced that it would not be increasing prices. CFO Richard McPhail told CNBC the store intends to “maintain our current pricing levels across our portfolio.“

While the Trump administration has made a deal with China to cut tariffs on Chinese imports from 145% to 30% as a 90-day negotiating period takes place, Walmart imports about one-third of its products overall, with China and Mexico being its two largest importers.

How does Home Depot intend to keep prices down?

By contrast, Home Depot reports that more than half of the merchandise it sells is produced in the United States. McPhail said Home Depot and its suppliers have recently diversified the source of their imports, including reducing products that come in from China. He says that by next year, no country outside the U.S. will total more than 10% of the company’s goods.

Walmart CFO John David Rainey previously told CNBC that the tariffs are still too high, so the big box store is increasing prices.

“It’s more than any supplier can absorb, and so I’m concerned that the consumer is going to start seeing higher prices,” Rainey said. “You’ll begin to see that, likely towards the tail end of this month and then certainly much more in June. “

How are Home Depot’s sales?

Home Depot expects sales to grow by 2.8% in 2025. But that number factors in the tariffs on China remaining at 30% and across-the-board tariffs on other countries staying at 10%.

For the first quarter of 2025, Home Depot had anticipated bringing in $39.31 billion in revenue. It took in a slightly higher amount, $39.86 billion.

As spring and home improvement projects kick into high gear, Home Depot’s McPhail said sales increased from March 2024 to March 2025 by 1.3% and rose from April to April by 1.8%.

What is the outlook going forward?

McPhail told CNBC that the company had a good April and expects that trend to continue into the summer.

“We clawed our way back through the remainder of the quarter and had a great April, and we’ve seen the level of customer engagement that we saw in April continue into the first few weeks of May,” he told CNBC.

Adding to its portfolio, Home Depot purchased SRS Distribution in 2024 for $18 billion. The Texas-based company sells supplies to roofing companies, pool installers and landscapers.

Home Depot appeals to affluent American consumers, with an estimated 80% being homeowners who have reaped the benefits of increased property values, according to the company. In addition, contractors who buy from Home Depot often work on home projects such as roofing, electrical work and kitchen remodeling.

What about Lowe’s?

As for rival Lowe’s, Yahoo Finance reports that in December, CFO Brandon Sink told shareholders on an earnings call that 40% of its products sold come from overseas and that tariffs would likely add to production costs.

Lowe’s first quarter earnings figures and revenue outlook are due on Wednesday, May 21.

Jason Morrell (Managing Editor ), Shianne DeLeon (Video Editor ), and Devin Pavlou (Digital Producer) contributed to this report.

Tags: China, Donald Trump, U.S. Economy

[Craig Nigrelli]

One week after Walmart announced that it would begin raising prices on products sold in its stores in the U.S., due to the Trump tariffs on China, big box rival Home Depot announced that it will not be increasing prices. CFO Richard McPhail told CNBC the store intends to “maintain our current pricing levels across our portfolio. “
While the Trump administration has made a deal with China, to cut tariffs on Chinese imports from 145% to 30% as a 90-day negotiating period takes place, Walmart imports about one-third of its products overall, with China and Mexico, its two largest importers.
By contrast, Home Depot reports more than half of the merchandise it sells is produced in the United States. McPhail says Home Depot and its suppliers have diversified the source of their imports in recent years, including reducing products that come in from China. He says by next year, no country, outside of the U.S., will total more than 10% of the company’s goods.
Walmart CFO John David Rainey had previously told CNBC, the tariffs are still too high. As a result, the big box store is upping prices and he specified when, adding,“it’s more than any supplier can absorb and so I’m concerned that the consumer is going to start seeing higher prices. You’ll begin to see that, likely towards the tail end of this month and then certainly much more in June. “
Home Depot expects sales to grow by 2.8% this year. But that number factors in the tariffs on China remaining at 30% and across the board tariffs on other countries staying at 10%.
For the first quarter of 2025, Home Depot had anticipated bringing in $39.31 billion in revenue. It took in a slightly higher amount at $39.86 billion.
As Spring and home improvement projects kick into high gear, Home Depot’s McPhail said sales increased from March of 2024 to March of 2025 by 1.3% and rose from April to April by 1.8 %.
He told CNBC, “We clawed our way back through the remainder of the quarter and had a great April, and we’ve seen the level of customer engagement that we saw in April continue into the first few weeks of May. “
Adding to its portfolio, Home Depot purchased SRS Distribution last year in an $18 billion deal.
The Texas-based company sells supplies to roofing companies, as well as pool installers and landscapers.
Home Depot appeals to affluent American consumers, with an estimated 80 % being
homeowners who have reaped the benefits of increased property values, according to the company. In addition, contractors who buy from Home Depot, are often working on home projects such as roofing, electrical work and kitchen remodeling.
As for rival Lowe’s, Yahoo Finance reports that in December, CFO Brandon Sink told shareholders on an earnings call that 40% of its products sold come from overseas and that tariffs would likely add to production costs.
Lowe’s first quarter earnings figures and revenue outlook are due out on Wednesday.

Why this story matters

The differing responses of major U.S. retailers to tariffs on Chinese imports highlight how supply chain strategies impact pricing, consumer costs, and competitive positioning in the retail sector.

Tariffs and supply chains

How companies like Home Depot and Walmart manage their supply chains in response to tariffs directly affects their pricing decisions and resilience to trade policy shifts.

Consumer impact

Decisions to raise or maintain prices amid tariffs influence the cost of goods for American consumers and may affect shopping behavior.

Get the big picture

Synthesized coverage insights across 39 media outlets

Debunking

While some political figures have claimed that tariffs are not passed on to consumers, multiple sources and economists confirm that businesses generally do pass some or all increased costs to consumers. Home Depot’s specific commitment to holding prices steady is unusual among large retailers, and is facilitated by its diversified sourcing and large-scale operations, according to its executives.

Diverging views

Articles in the “left” category emphasize the economic pressures from tariffs and highlight Home Depot’s efforts to avoid price hikes, contrasting this with Walmart’s decision to raise prices. Right-leaning coverage is minimal or unrelated. The left-leaning sources also discuss political debates over who should bear tariff-related costs, referencing statements from both President Trump and Home Depot executives.

History lesson

Historically, U.S. tariffs have led to increased costs for retailers, which are often passed to consumers. Retailers, including Home Depot, have periodically diversified their supply chains in response to such trade measures. Past housing market downturns — such as the 2008 crisis — also had ripple effects on home improvement retail, shaping cautious approaches in current strategies.

Sources

Bias comparison

Media outlets on the left concentrate narrowly on Home Depot’s revenue growth and modest sales gains, emphasizing stable customer spending without delving into broader economic factors.
Media outlets in the center emphasize the restrictive impact of Trump-era tariffs and a “skittish housing market,” framing Home Depot’s stable pricing as a strategic feat amid industry-wide price hikes and weak consumer sentiment.
Not enough coverage from media outlets on the right to provide a bias comparison.

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Media landscape

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87 total sources

Key points from the Left

Home Depot's revenue increased to $39.86 billion in the first quarter, exceeding analysts' expectations of $39.3 billion, according to the company.
Sales at stores open for at least a year decreased by 0.3%, while U.S. comparable store sales rose by 0.2%, according to the data.
Customer transactions grew by 2.1%, and the average spending per customer climbed to $90.71, reflecting a slight increase from the previous year.
Shares of Home Depot rose approximately 2% in pre-market trading, indicating positive investor reactions, as noted before market open.

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Key points from the Center

Home Depot, the world's largest home improvement retailer, reported first-quarter sales that exceeded Wall Street estimates on May 20, with shares rising over 2% premarket.
This strong sales performance was achieved even as the housing market remained weak and widespread uncertainty from President Donald Trump's tariffs prompted many retailers to reduce or withdraw their forecasts.
Home Depot experienced strong sales driven by its core professional contractor customers and homeowners undertaking smaller repair projects, supported by enhancements to its supply chain and the recent acquisition of Texas-based SRS Distribution.
For the quarter ending May 4, the company reported revenue of $39.86 billion, marking a 9% increase that exceeded analysts' expectations of an 8% rise to $39.31 billion.
Home Depot reaffirmed its fiscal 2025 sales growth target of 2.8%, suggesting stable demand could support its outlook even amid macroeconomic challenges and trade-related uncertainty.

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