Home Depot braces for downturn in consumer spending after reporting slight sales increase in Q2

By lauraharris // 2025-05-25

Copy

Home Depot anticipates a downturn in consumer spending amid economic uncertainty, despite modest Q2 earnings and a slight sales increase.
While Home Depot avoids broad price hikes, some products may be discontinued if tariffs make them unprofitable. The company is diversifying its supply chain to reduce reliance on any single foreign country.
CEO Ted Decker notes that Home Depot's customers remain financially stable, with spending focused on smaller home projects rather than large renovations.
Unlike Walmart and Stanley Black and Decker, which are raising prices due to tariffs, Home Depot is working to minimize cost increases for consumers.
President Donald Trump has criticized companies like Walmart for blaming tariffs for price hikes, urging them to absorb costs rather than pass them on to customers.

Home Depot, the nation's largest home improvement retailer, is preparing for financial challenges in the coming months as the U.S. economy shows signs of strain. Despite reporting modest second-quarter earnings, executives warned of a looming downturn in consumer spending, just as the critical holiday shopping season approaches. During an earnings call on Tuesday, May 20, Home Depot executives reassured investors that they do not foresee "broad-based price increases" for customers, despite new tariffs on imported goods. However, some items may be phased out if tariffs render them economically unviable. "We don't see broad-based price increases for our customers at all going forward," Home Depot executive Billy Bastek said during the earnings call with analysts. "There are items that we have that could potentially be impacted by a tariff that, candidly, we won't have going forward. There'll be some things that don't make sense that just end up going away." Since tariffs on Chinese goods were first imposed, Home Depot has worked to diversify its supply chain, aiming to source no more than 10 percent of its products from any single foreign country by mid-2026. The company has also avoided major cost increases from lumber tariffs due to a separate trade deal with Canada. (Related: Trump's 125% tariff triggers panic among Chinese Amazon sellers.) CEO Ted Decker emphasized that Home Depot's core customers remain financially stable, even as economic uncertainty looms. "We have a very different customer and a very different sort of use case for expenditure in home improvement," Decker told investors. "Our customer is in a good spot right now." Home Depot reported a slight 0.2 percent increase in U.S. sales and a 2.1 percent rise in transactions last quarter, driven by small-scale home projects. However, high mortgage rates and a sluggish housing market continue to deter major renovations. Despite these challenges, Decker struck an optimistic tone, suggesting the U.S. economy has moved past the worst recession fears, citing strong employment and easing inflation.

Walmart warns tariffs could further burden inflation-weary consumers

Meanwhile, Walmart warned that tariffs could further burden inflation-weary consumers. "We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren't able to absorb all the pressure given the reality of narrow retail margins," Walmart CEO Doug McMillon said last week on an earnings call. "The higher tariffs will result in higher prices." The pressure isn't limited to Walmart. Stanley Black & Decker, which owns brands like DeWalt and Craftsman, has already raised prices by high single digits this year due to tariffs and plans another increase later in 2024. However, President Donald Trump has dismissed corporate complaints and accused Walmart of shifting blame. He said, "Walmart should STOP trying to blame tariffs as the reason for raising prices throughout the chain. Between Walmart and China they should, as is said, 'EAT THE TARIFFS,' and not charge valued customers ANYTHING. I'll be watching, and so will your customers!!!" Trump has also criticized Amazon and Mattel for considering similar price adjustments, framing corporate resistance as disloyalty to American consumers. Head over to Trump.news for related news. Trump should put the tariffs on immediately, expert says. Watch this video.

This video is from the NewsClips channel on Brighteon.com.

NATURAL NEWS

Walmart warns tariffs could further burden inflation-weary consumers

More related stories: