Home Depot warns it may raise prices because of Trump’s tariffs

Home Depot warned that it may raise prices on select merchandise in order to offset the cost of the Trump administration’s tariffs on imports — marking a reversal from the retailer’s earlier stance against trade-related pricing adjustments.

The nation’s largest home improvement chain said during an earnings call on Tuesday that pricing changes would affect specific product categories, though executives characterized the adjustments as measured rather than sweeping.

Richard McPhail, Home Depot’s chief financial officer, told the Wall Street Journal that certain items would see price modifications in response to import duties.

“There will be some modest price movement for some categories,” McPhail told the Journal, signaling the company’s evolving approach to managing tariff pressures.

The likely price hikes come as customers pull back on home renovations.

Economic headwinds and elevated interest rates have prompted many homeowners to delay substantial remodeling projects, opting instead for minor improvements that don’t require financing, according to Home Depot executives.

The Atlanta-based company reported that roughly half its merchandise originates from domestic suppliers, shielding those products from international trade duties — though imported goods remain vulnerable to cost increases.

The retailer’s latest quarterly performance reflected mixed consumer behavior patterns.

While comparable store sales edged up 1%, the number of customer visits declined by 0.9%.

This divergence suggests shoppers are spending more per trip while making fewer overall purchases. Wall Street responded favorably to the earnings report, pushing Home Depot shares higher by more than 4% during Tuesday trading.

Home Depot CEO Ted Decker said mortgage rate relief could spur renewed customer activity.

“Some relief on mortgage rates in particular could help,” Decker told analysts during the earnings call on Tuesday.

The residential real estate market’s persistent challenges have weighed on Home Depot’s performance in recent periods.

Elevated property values combined with economic uncertainty have dampened home sales activity, reducing demand for renovations typically done before listing properties or after purchasing new homes.

Additionally, costly financing has discouraged homeowners from pursuing major improvement projects requiring loans.

Despite home equity values doubling since 2019, property owners are tapping into that wealth at historically low rates, suggesting widespread reluctance to take on debt even when collateral values support borrowing, according to McPhail.

Meanwhile, inflation has dampened foot traffic to the store, according to research firm Placer.ai, which documented a 2.6% decline in Home Depot store visits during the second quarter compared to the previous year’s period.

To counter softening do-it-yourself demand, Home Depot has intensified efforts to capture professional contractor business. The strategy includes expanded bulk purchasing options, customized ordering capabilities and enhanced support services tailored to commercial customers.

This professional market focus accelerated with Home Depot’s recent agreement to purchase building materials supplier GMS for $4.3 billion.

The transaction follows last year’s $18.25 billion acquisition of distribution firm SRS, reinforcing the company’s commitment to serving professional builders.

Management projects the GMS acquisition will contribute positively to earnings within twelve months of completion.

“It’s important to remember that more than 50% of our products are sourced domestically and not subject to tariffs,” a Home Depot spokesperson told The Post.

“For some imported goods, tariff rates are significantly higher than last quarter, so there will be modest price movement in certain categories, but it won’t be broad based.”

The company added that “our customers shop with us for entire projects — not just a single item — so we’re focused on protecting the overall cost of the project while maintaining the best value.”

“We’ll take a portfolio approach, as we always do, and intend to hold a price leadership position in home improvement,” the company rep said.

“This view is reflected in our reaffirmed guidance. In terms of categories, we don’t break that out for competitive reasons.”