(CNN) Home Depot stated on Tuesday that the expense of tariffs may result in price increases for some of its products.
The biggest home improvement store in America hasn’t said anything about how tariffs are affecting its prices thus far. However, following the release of its quarterly results on Tuesday, CFO Richard McPhail stated that Home Depot would have to raise some prices due to import levies imposed by the Trump administration.
In an interview with the Wall Street Journal that the company confirmed to CNN, he stated that tariff rates for certain imported goods are much higher today than they were at this time last quarter. As a result, while some categories will see some moderate price fluctuation, it won’t be widespread.
When questioned three months ago about how tariffs might affect pricing, the business stated that while it would not speculate on its price intentions, tariffs might force it to discontinue selling some items.
According to Home Depot, little less than half of their goods is sourced from foreign vendors. The business has previously stated that it wants to diversify its suppliers so that no more than 10% of its products come from outside the nation.
Due to increased operating expenses, Home Depot’s net income decreased 0.2% over the same period last year, even though sales increased 5% during the quarter. Since many clients are delaying major home improvement plans due to economic uncertainties and high mortgage rates, the company anticipates a 2% decline in full-year earnings per share.
During the earnings call, CEO Ted Decker stated that a reduction in mortgage rates in particular could be beneficial. For the majority of the year, mortgage rates have been stagnant at slightly around 7%.
General economic uncertainty is cited by both consumers and experts as the main reason for postponing the major project. That exceeds both labor availability and project costs. He went on to say that economic uncertainty is by far the most important factor.
However, Home Depot is certain that those big initiatives will eventually materialize and produce better outcomes, according to company executives.
“Our customers tell us that they are delaying larger remodeling projects because of the rate environment,” McPhail said. According to our experts, their clients inform them that they are postponing projects. Projects are not being canceled. The desire for home remodeling is still there. Therefore, it is our responsibility to prepare ourselves for that.
