HOME DEPOT, INC.

We reported net sales of $41.4 billion in the third quarter of fiscal 2025. Net earnings were $3.6 billion, or $3.62 per diluted share. For the first nine months of fiscal 2025, net sales were $126.5 billion and net earnings were $11.6 billion, or $11.65 per diluted share.

During the third quarter of fiscal 2025, we opened three new stores in the U.S., resulting in a total store count of 2,356 at November 2, 2025. A total of 322 stores, or 13.7%, were located in Canada and Mexico. Our inventory turnover ratio was 4.5 times at the end of the third quarter of fiscal 2025, compared to 4.8 times at the end of the third quarter of fiscal 2024. The decrease in our inventory turnover ratio was primarily driven by higher average inventory levels during the first nine months of fiscal 2025.

During the first nine months of fiscal 2025, we generated $13.0 billion of cash flow from operations, received $2.9 billion of proceeds from commercial paper borrowings, net of repayments, and received $2.1 billion of proceeds from the issuance of long-term debt, net of discounts. This cash flow, together with cash on hand, was used to fund $6.9 billion in cash dividends, repay $3.4 billion of long-term debt, and fund $2.6 billion in capital expenditures. We also completed the GMS acquisition, including the repayment of certain of its outstanding debt, for aggregate cash consideration totaling approximately $5.5 billion. In February 2025, we announced a 2.2% increase in our quarterly cash dividend to $2.30 per share.

Our ROIC for the trailing twelve-month period was 26.3% at the end of the third quarter of fiscal 2025 and 31.5% at the end of the third quarter of fiscal 2024. The decrease in ROIC was primarily driven by higher average long-term debt and higher average equity largely due to the financing of the SRS acquisition. See the Non-GAAP Financial Measures section below for our definition and calculation of ROIC.

GMS Acquisition

On June 29, 2025, we entered into a definitive agreement to acquire GMS, a leading distributor of specialty building products, including drywall, ceilings, steel framing and other complementary construction products, through branches located across the U.S. and Canada. Under the terms of the merger agreement, we, through a wholly owned subsidiary, made a cash tender offer to purchase all outstanding shares of GMS common stock for $110 per share. All conditions of the offer were satisfied, including receipt of the requisite regulatory approvals, and the merger was completed on September 4, 2025. As a result of the merger, GMS became a direct subsidiary of SRS and an indirect, wholly owned subsidiary of the Company. We believe the GMS acquisition will enhance SRS's position as a leading multi-category building materials distributor, bringing differentiated capabilities, product categories and customer relationships that are highly complementary to SRS's existing business. Refer to Note 10 to our consolidated financial statements for further discussion on the merger.

Tariffs and Other Trade Policy Matters

We continue to monitor developments with respect to tariffs and other trade policy matters closely. We have worked, and continue to work, diligently to diversify our global supply chain and to implement other cost mitigation initiatives. While we have experienced increased costs as a result of tariffs, our actions, including diversification efforts and modest price increases, along with our scale, vendor relationships, experienced internal teams, and other initiatives have allowed us to effectively mitigate the impact on our results of operations. We plan to continue to assess our sourcing and other mitigation strategies to maintain a strong value proposition for our customers and believe we remain well positioned to manage the impact that tariffs in effect as of the date of this filing are expected to have on our business.

As trade policy discussions and developments are ongoing, we cannot predict with certainty their ultimate impact on our business in future periods, including our results of operations and cash flows. For more information on these risks and uncertainties see Part I, Item 1A. “Risk Factors” of our 2024 Form 10-K.