Will Appliance & Building Material Sales Keep Lifting Home Depot’s Q2?

The Home Depot, Inc.’s HD first-quarter fiscal 2025 results revealed pockets of growth in an otherwise challenging environment. While total comparable sales slipped 0.3%, six of the retailer’s sixteen merchandising departments — including appliances and building materials — posted positive comps. These categories stood out, fueled largely by the Pro customer segment, which outperformed DIY shoppers and drove demand for core products such as gypsum, decking and concrete.

The key question for the second quarter is whether this momentum can overcome broader macroeconomic pressures. Management noted that elevated interest rates continue to weigh on large-scale remodeling projects, particularly kitchens and bathrooms that often require financing. This has kept big-ticket activity subdued, though transactions above $1,000 saw modest growth in the first quarter, signaling selective higher-value spending.

Seasonal factors could provide a lift in the second quarter, as summer typically brings heightened demand for construction, repair and upgrade projects. Appliances may also benefit from ongoing replacement cycles and competitive promotions aimed at value-conscious consumers.

Early second-quarter trends point to steady customer engagement, suggesting these dependable categories could once again help balance softer discretionary spending. With earnings due Aug. 19, investors will be watching closely to see if appliance and building material sales — driven by Pro demand — can serve as a stabilizing force for Home Depot’s results.

The Zacks Consensus Estimate for Home Depot’s second-quarter sales implies year-over-year growth of 5.4%, while the same for earnings per share suggests a marginal increase of 0.9%.

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Home Depot shares have risen 10.7% in the past year compared with the industry’s growth of 6.4%. HD has comfortably outperformed key peers, such as Lowe’s Companies Inc. LOW and Floor & Decor Holdings, Inc. FND. During the same period, Lowe’s shares have risen 1.6%, while Floor & Decor Holdings has fallen 24.7%. 

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From a valuation standpoint, Home Depot trades at a forward price-to-sales ratio of 2.29, higher than the industry’s 1.62. HD carries a Value Score of C. 

This premium positioning is especially notable when compared to peers like Lowe’s (with a forward 12-month P/S ratio of 1.57) and Floor & Decor (1.69).

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