Home Depot: comparable sales, acquisitions and cash

Home Depot's fiscal 2025 sales were $164.683 billion, while comparable sales increased only 0.3% on their defined calendar. Operating cash less capex was $12.646 billion; after the separate net business-acquisition payment, a selected $7.236 billion remained. The investment case therefore involves both existing-store trading and the funding of acquired growth.

Latest released reporting at October 25, 2026

Q2 FY2026 covers 2026-05-04 through 2026-08-02 and was released 2026-08-18. Revenue was $47,861 million in this quarter. Source: official Q2 FY2026 results.

FY2025 ended in February 2026. Group sales, comparable sales and acquired-business contributions have different populations; higher reported sales do not establish the return on acquired operations or remove housing-cycle sensitivity.

Full-year revenue (reported)

Reported whole-company revenue, before operating expenses and reinvestment; it is not a cash-flow or valuation measure. Source: FY2025 annual report and comparative statements.

Home-improvement demand and professional supply are different growth questions

Home Depot sells home-improvement and building products through stores and online channels, serving consumers and professional customers. Its cited filing also describes installation and rental services. The group's acquired distribution businesses add another operating population to consider beside trading at established locations.

Comparable sales rose only 0.3% on the defined calendar while the group paid $5,410 million for acquired businesses. Those measures address different growth questions. Existing-location demand can be relatively steady while the company spends cash to broaden its business, so the operating case needs both merchandise-replenishment economics and the funding of acquired earnings.

Dated reporting reference

The historical reference is The Home Depot fiscal 2025 Form 10-K, signed March 18, 2026. It covers the consolidated group for the 52 weeks ended February 1, 2026. Monetary values below are $ millions; the comparable-sales row is a percentage.

Reconcile the calendar and acquisition population

fiscal 2024 had 53 weeks, and the fiscal 2025 comparable-sales calculation uses equivalent 52-week periods. The filing identifies SRS and GMS as contributors to consolidated sales growth, with GMS acquired September 4, 2025. Acquisitions typically enter comparable sales after more than 52 weeks of ownership. Comparable sales is therefore neither all reported growth nor a ready-made acquisition-adjusted organic-growth series.

Prepare a bridge with separate lines for comparable activity, new locations, acquisition contributions, foreign exchange and calendar effects. Use the issuer definitions for each input; do not subtract the headline comp percentage from total growth and label the remainder acquisition growth. Their denominators and populations can differ.

Connect the sales case to stock and supplier cash

A retailer can recognize a sale from inventory purchased earlier, while purchasing for future sales consumes cash before the related profit is recognized. For a forecast, separate opening stock, purchases, cost of goods sold and identified scope or valuation changes. Acquired inventory is part of a perimeter change and should not be treated as ordinary cash purchasing in the operating bridge.

Assume an illustrative expansion requires $100 million of additional inventory at cost and vendors finance 40% of that increment through payables. The remaining cash requirement is 100 × (1 − 0.40) = $60 million. This exercise assumes no immediate profit change and ignores taxes and other balances. A higher inventory balance is not itself an expense, while its funding can reduce cash available for another commitment.

Keep capital spending and acquisitions visible

The narrow cash bridge after capital expenditures is $12,646 million: 16,325 − 3,679. Deducting the separate net business-acquisition cash line gives $7,236 million: 12,646 − 5,410. These are derived subtotals before other investing and financing movements, not an issuer-defined FCF measure or cash available after every obligation.

For profit-to-cash analysis, identify inventory purchasing, vendor-payment dates and cash taxes rather than attributing the difference to margin alone. For investment analysis, distinguish maintaining existing operations from acquiring additional earnings. If you forecast earnings from acquired businesses, retain a consistent treatment of their purchase funding and avoid counting the same acquisition outflow again as recurring capital expenditure.

Build a downside that exposes the funding trade-off

Test slower comparable demand with committed stock receipts unchanged. Then compare it with a deliberate purchasing reduction that specifies any availability or markdown consequence. The decision is whether the operating case can release cash without sacrificing more contribution than the funding benefit is worth.

In a valuation, keep your selected consolidation scope stable across the forecast and terminal period. Use a separate assumption for later acquisitions if they are part of the case; a partial-year acquired revenue contribution should not quietly become a full-year organic growth rate.

What customers pay for and what changes the economics

Home Depot serves consumers and professional customers through stores, digital channels and acquired distribution operations, with installation and rental services alongside merchandise. Its FY2025 report describes Pro-focused assortments, a dedicated sales force, delivery capabilities, preferred pricing and trade credit. A complex professional order therefore offers more than a store basket, but also requires different fulfillment, inventory and customer-service economics. (FY2025 source.)

Analysis: A larger Pro order is valuable only after the cost of assembling, delivering and financing it. Test whether broader product coverage improves share of the customer's project without excessive inventory or fragmented deliveries. Separate that investment case from a recovery in discretionary household projects: they can produce similar sales growth with different working-capital and operating-cost needs.

Operating signals to carry into the forecast

Watch these signals on a consistent period and definition. Undisclosed measures remain questions to investigate, rather than supplied KPI data.

• Comparable transactions versus average ticket: separate customer activity from price and project size.
• Pro distribution growth on a consistent ownership basis: distinguish acquired months from comparable demand.
• Delivery and inventory productivity: test whether the complex-order offer earns its incremental cost.
• Gross margin and operating expense together: a sales mix shift can trade merchandise margin for scale or service costs.

SWOT and the forecast consequence

SWOT classifications and forecast consequences are analytical judgments; evidence uses the dated sources cited below.

Valuation implication: Compare a productive Pro expansion with a case where sales grow but stock and fulfillment absorb the benefit. A household-project recovery is a separate scenario. Preserve the established comparable-sales definitions and acquisition-payment treatment before assigning a higher terminal margin.

Scope of the reference

This analysis combines selected historical group figures with an original cash-funding exercise. It does not provide a current valuation, a complete financial dataset or a specification of the Home Depot DCF file.