Home Depot won’t raise prices over tariffs... unlike Walmart

Unlike Walmart, big box retailer Home Depot (HD) says it won’t raise prices due to tariffs thanks to its diversified supply chains.

“We intend to generally maintain our current pricing levels across our portfolio,” said Richard McPhail, Home Depot’s chief financial officer, highlighting the company’s large scale and extensive partnerships.

He noted that over half of Home Depot’s products are sourced from within the U.S., helping shield the company from much of the impact of tariffs.

Home Depot’s pricing strategy is a “great opportunity for us to take share, and it’s a great opportunity for our suppliers to take share as well,” he said.

McPhail made the remarks as Home Depot reported mixed quarterly results, which analysts chalked up to a weakening housing market.

Total revenue rose 9.4% to $39.86 billion, beating Wall Street’s estimate of $39.29 billion. However, same-store sales slipped 0.3%, slightly below the expected 0.2% decline.

Meanwhile, net earnings fell to $3.56 per share, missing forecasts by 3 cents.

Home Depot’s stock was little changed after the earnings report but has pared its year-to-date loss to under 4% following a sharp rebound over the past month.

Home Depot vs. Walmart

Home Depot’s pricing strategy will likely resonate with shoppers, especially after Walmart, the nation’s largest retailer, warned that higher tariffs will soon be passed on to consumers.

Walmart CFO John David Rainey said the added costs are “more than any supplier can absorb.”

Although the two companies cater to slightly different demographics, their diverging pricing strategies highlight the risks of relying on China amid ongoing trade uncertainty.

According to the Alliance for American Manufacturing, 70% to 80% of Walmart’s products are made in China, with less than 20% sourced from American producers.

Walmart has pledged to invest $250 billion in American-made goods over 10 years, but that pace may not be fast enough for a rapidly shifting Trump-era trade agenda that emphasizes domestic sourcing.

Another advantage for Home Depot is its consistently higher profit margins. The home improvement retailer’s net profit margin exceeds 9%, compared to less than 3% for Walmart.

That leaves Walmart more vulnerable as the Trump administration pressures companies to “eat the tariffs” rather than pass on higher costs to consumers.