Home Depot Inc (HD)
Profitability ratios
Return on sales
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | |
|---|---|---|---|---|---|
| Gross profit margin | 33.42% | 33.38% | 33.38% | 33.53% | 33.53% |
| Operating profit margin | 13.49% | 14.21% | 14.21% | 15.27% | 15.27% |
| Pretax margin | 12.17% | 13.05% | 13.05% | 14.28% | 14.28% |
| Net profit margin | 9.28% | 9.92% | 9.92% | 10.87% | 10.87% |
Home Depot Inc's profitability ratios indicate the company's ability to generate profits in relation to its revenue.
1. Gross Profit Margin: Home Depot has maintained a consistent gross profit margin around 33% over the past few years, which reflects its ability to efficiently manage production costs and pricing strategies.
2. Operating Profit Margin: The operating profit margin has decreased slightly from 15.27% in January 2023 to 13.49% in January 2025. This decline suggests that the company may be facing challenges in controlling its operating expenses or experiencing a decrease in operating income.
3. Pretax Margin: Home Depot's pretax margin has also shown a decreasing trend, falling from 14.28% in January 2023 to 12.17% in January 2025. This could indicate that the company is facing higher taxes or other non-operating expenses impacting its profitability.
4. Net Profit Margin: The net profit margin, which represents the bottom line profitability after considering all expenses, has decreased from 10.87% in January 2023 to 9.28% in January 2025. This suggests that Home Depot's profitability at the net level has experienced some pressure over the years.
Overall, while Home Depot maintains a healthy gross profit margin, the declining trend in operating, pretax, and net profit margins over the years indicates potential challenges in managing operating expenses, taxes, and other costs impacting the company's bottom line profitability.
Return on investment
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 22.40% | 28.34% | 28.34% | 31.45% | 31.45% |
| Return on assets (ROA) | 15.40% | 19.79% | 19.79% | 22.38% | 22.38% |
| Return on total capital | 327.21% | 2,077.49% | 2,094.54% | 1,542.51% | 1,542.51% |
| Return on equity (ROE) | 222.98% | 1,450.48% | 1,450.48% | 1,095.07% | 1,095.07% |
Home Depot Inc's profitability ratios show consistent performance over the years, although there are some fluctuations. Operating return on assets (Operating ROA) remains strong, indicating the company's ability to generate profit from its operating activities, with a gradual decline from 31.45% in January 2023 to 22.40% in January 2025.
Return on assets (ROA) also demonstrates profitability, albeit at a slightly lower level compared to Operating ROA. The trend shows a decrease from 22.38% in January 2023 to 15.40% in January 2025, reflecting a decrease in the company's ability to generate profit from its assets.
Return on total capital has shown significant volatility, with a substantial increase from 1,542.51% in January 2023 to 2,077.49% in January 2024, before dropping to 327.21% in January 2025. This ratio signifies the company's efficiency in generating profit from both debt and equity capital employed.
Return on equity (ROE) remains at high levels, indicating the company's ability to generate profit for its shareholders. The trend shows a gradual decline from 1,095.07% in January 2023 to 222.98% in January 2025, reflecting decreasing profitability in relation to the shareholders' equity.
Overall, Home Depot Inc's profitability ratios demonstrate a mix of strong profitability and some fluctuations, highlighting the company's ability to efficiently utilize its assets and capital to generate returns for its stakeholders.