Home Depot Inc. (NYSE:HD)

Gross Profit Margin

The gross profit margin exhibits a gradual decline over the observed periods, starting at 34.09% in early 2020 and decreasing to 33.42% by early 2025. This trend reflects a slight erosion in the company's ability to maintain gross profitability relative to revenue, indicating potential pressures on cost of goods sold or pricing strategies.

Operating Profit Margin

The operating profit margin shows a more variable pattern. It initially decreases from 14.37% in early 2020 to 13.84% in early 2021, then improves substantially to peak at 15.27% in early 2023. However, subsequent periods reveal a decline to 13.49% by early 2025. This fluctuation suggests periods of improved operational efficiency followed by challenges impacting operating costs or function performance.

Net Profit Margin

The net profit margin follows a similar, albeit less volatile, pattern compared to the operating margin. It decreases from 10.20% to 9.74% between early 2020 and early 2021, then rises to 10.87% for two consecutive years before declining again to 9.28% at the end of the period. This indicates variations in overall profitability influenced by non-operating factors or changes in expenses such as taxes or interest.

Return on Equity (ROE)

Return on equity data is sporadic and exhibits extreme variability. It is absent in some periods, with recorded values demonstrating extremely high percentages: 1095.07% in early 2023, increasing to 1450.48% in early 2024 before sharply dropping to 222.98% in early 2025. Such anomalies may indicate accounting or reporting inconsistencies or effects of unusual events substantially impacting equity returns.

Return on Assets (ROA)

Return on assets starts at a strong 21.94% in early 2020, decreases to 18.23% in early 2021, then recovers to above 22% by early 2022. After this peak, there is a steady decline through early 2025, ending at 15.4%. This downward trend over the longer term reflects reduced efficiency in generating earnings from the company’s asset base.

The financial data reveals several key trends over the reported years. Net sales have displayed a consistent upward trajectory, increasing from 110,225 million US dollars in early 2020 to 159,514 million US dollars by early 2025. This growth indicates robust revenue expansion over the six-year period.

Gross profit has also exhibited a general rising trend, moving from 37,572 million US dollars in 2020 to 53,308 million US dollars in 2025. Although the figures show some fluctuations, the overall increase in gross profit aligns with the increase in net sales, suggesting effective cost management in relation to revenue growth.

Regarding profitability margins, the gross profit margin shows a slight declining trend. Starting at 34.09% in 2020, it gradually decreases to around 33.42% in 2025. This subtle decline indicates that the cost of goods sold may be increasing at a marginally faster rate than sales, which slightly compresses the gross margin despite higher absolute gross profit levels.

In summary, the data reflects steady growth in sales and gross profit, accompanied by a minor contraction in gross profit margin percentage. This pattern may suggest growing operational scale with some pressure on cost efficiency or pricing, warranting close monitoring of margin trends as sales volumes continue to expand.

Net Sales

Net sales have exhibited a consistent upward trend from February 2020 to February 2025. Starting at $110.2 billion in 2020, there is steady growth each year, reaching $159.5 billion by 2025. This reflects a strong increase in revenue over the analyzed period.

Operating Income

Operating income increased significantly from $15.8 billion in 2020 to a peak of $24.0 billion in 2023. However, it slightly declined thereafter, decreasing to $21.7 billion in 2024 and further slightly to $21.5 billion in 2025. Despite the recent decrease, operating income remains robust compared to the initial year.

Operating Profit Margin

The operating profit margin demonstrated some volatility over the years. It started at 14.37% in 2020, decreased slightly to 13.84% in 2021, followed by a notable increase to a peak of 15.27% in 2023. Subsequently, the margin declined in the final two years, dropping to 14.21% in 2024 and further to 13.49% in 2025. The peak margins in the middle of the period indicate a phase of higher operational efficiency or profitability relative to sales.

Summary of Trends

The data indicates strong sales growth across the period, with revenue increasing consistently each year. Operating income growth was robust until 2023 but showed a slight decline in the last two years, possibly reflecting increased costs or margin pressures. The operating profit margin peaked during 2022 and 2023 but then declined, suggesting that despite increasing sales, the company faced challenges in maintaining operating profitability ratios at peak levels in the last two years. Overall, the trends suggest strong top-line growth accompanied by fluctuating operating efficiency.

Net Earnings

The net earnings exhibited an overall upward trend from 2020 to 2023, increasing from 11,242 million USD in 2020 to a peak of 17,105 million USD in 2023. However, there was a decline in the following years, with net earnings decreasing to 15,143 million USD in 2024 and further to 14,806 million USD in 2025. This indicates a recent downturn after consistent growth over the prior years.

Net Sales

Net sales showed a consistent increasing pattern throughout the entire period. Starting at 110,225 million USD in 2020, sales grew each year, reaching 159,514 million USD by 2025. Despite some fluctuation in net earnings, net sales maintained steady growth, demonstrating strong top-line performance.

Net Profit Margin

The net profit margin fluctuated within a relatively narrow range over the years. It started at 10.2% in 2020, slightly declined to 9.74% in 2021, then recovered to 10.87% in both 2022 and 2023. Following this period of stability at a higher margin, there was a downward trend to 9.92% in 2024 and further down to 9.28% in 2025. The decline in profit margin over the last two years indicates potential challenges in maintaining profitability despite rising sales.

Overall Observations

The data reflects strong sales growth over the six-year period, suggesting effective revenue generation strategies. However, profitability, as indicated by both net earnings and profit margin, peaked in 2023 and has since weakened. The decline in net profit margin in the last two years, coupled with decreasing net earnings despite increasing sales, may point to rising costs, pricing pressures, or other operational challenges affecting profitability.

Net earnings

The net earnings exhibit a generally upward trend from February 2, 2020, to January 29, 2023, increasing from 11,242 million US dollars to 17,105 million US dollars. However, a decline is observed in the subsequent periods, with net earnings decreasing to 15,143 million US dollars on January 28, 2024, and further to 14,806 million US dollars by February 2, 2025. This fluctuation suggests a peak in profitability around early 2023, followed by a moderate reduction in earnings over the next two years.

Stockholders' equity (deficit)

Stockholders' equity shows significant volatility over the analyzed periods. It begins with a deficit of negative 3,116 million US dollars in early 2020, then rises sharply to a positive 3,299 million US dollars by January 31, 2021. A decline follows, with equity turning negative again at negative 1,696 million US dollars by early 2022. From this point onward, equity improves gradually, becoming positive again at 1,562 million US dollars by January 29, 2023, but declines slightly to 1,044 million US dollars in early 2024 before increasing substantially to 6,640 million US dollars by February 2, 2025. These fluctuations indicate periods of financial restructuring or changes in retained earnings impacting the equity base significantly.

Return on Equity (ROE)

Return on equity presents irregular data points. It is missing for some years but where available, extremely high values are noted. Specifically, on January 29, 2023, ROE is recorded at 1095.07%, increasing dramatically to 1450.48% on January 28, 2024, before dropping to 222.98% by February 2, 2025. Such elevated ROE figures, especially exceeding 1000%, typically imply periods of relatively low or negative equity paired with strong net earnings, inflating the ratio. The decrease in 2025 suggests some normalization but still reflects a strong return relative to equity.

General Insights

The combined analysis reveals a company with strong earnings growth initially, followed by slight earnings decline. Equity fluctuations are pronounced, possibly due to financial activities such as share repurchases, dividends, or other capital adjustments. The extreme ROE values corroborate the equity volatility, indicating periods where the equity base was constrained or negative, thus amplifying ROE. Overall, the financial data point to a volatile equity position contrasting with relatively stable and robust earnings performance.

The financial data reveals several significant trends over the analyzed periods, focusing on net earnings, total assets, and return on assets (ROA).

Net Earnings

Net earnings experienced a general upward trajectory from 11,242 million USD in early 2020 to a peak of 17,105 million USD by early 2023. However, subsequent values indicate a decline to 15,143 million USD in 2024 and further to 14,806 million USD in early 2025. This suggests that while profitability grew strongly initially, it softened in the most recent years.

Total Assets

Total assets showed a consistent increase throughout the periods, rising from 51,236 million USD in 2020 to 96,119 million USD by early 2025. The most substantial increments occurred between 2020 and 2021, with continued steady growth afterward. This upward trend in asset base indicates ongoing investments and asset accumulation.

Return on Assets (ROA)

ROA exhibited volatility, beginning at 21.94% in 2020, decreasing to 18.23% in 2021, then rising again to 22.86% in 2022 and stabilizing around 22.38% in 2023. However, the ROA declined to 19.79% in 2024 and further dropped to 15.4% by early 2025. This declining ROA towards the later periods indicates a reduction in asset efficiency in generating profits despite the growing asset base.

In summary, while net earnings and total assets increased over most of the period, recent years have seen a drop in net earnings and ROA, which may signal challenges in maintaining profitability and asset efficiency. The growth in total assets has not translated proportionally into profitability improvements, highlighting potential areas for efficiency enhancements.