The home improvement giant said Tuesday it has no plans to pass on higher import costs to consumers, thanks to a supply chain strategy that’s looking increasingly prescient. CFO Richard McPhail told investors the company is working to ensure that no single country outside the U.S. will account for more than 10% of its purchases within the next year. That shift, paired with tight supplier partnerships, is allowing Home Depot to "generally maintain current pricing levels across its portfolio."

Tariffs Trigger Diverging Strategies

This stance sets Home Depot apart from competitors like Walmart, which warned last week that it would begin raising prices later this month due to tariff pressures - particularly on general merchandise sourced from China. That move drew criticism from Donald Trump, who took to social media to tell Walmart to “eat the tariffs” instead of blaming trade policy for higher prices. “Walmart made BILLIONS OF DOLLARS last year, far more than expected,” Trump wrote, adding that the company should not pass costs on to its “valued customers.”

Walmart defended its position, noting that its razor-thin retail margins limit its ability to absorb additional costs. CEO Doug McMillon said the company would work to protect grocery prices but acknowledged it couldn’t absorb the full hit from tariffs on imported goods.

Home Depot and Walmart aren’t just retail giants - they’re bellwethers of the American consumer. Their performance offers a window into household spending behavior across income brackets, making them closely watched by investors and policymakers alike. When either company signals strength or strain in consumer demand, it often informs broader assessments of economic momentum, inflation trends, and ultimately, decisions at the Federal Reserve about interest rate policy.

Source: MarketScreener

A Resilient Quarter

For Home Depot, the calculus is different than Walmart's. Less than half of its goods are sourced outside North America, and its footprint in China has been shrinking for years. That’s given the Atlanta-based company a buffer - and allowed it to focus on its core base of professional contractors and DIY customers, who helped lift first-quarter sales above Wall Street expectations. Net sales reached $39.86 billion, versus analysts’ forecast of $39.31 billion, according to LSEG. While adjusted profit per share fell slightly short at $3.56 (versus $3.60 expected), the company reiterated its full-year sales forecast of 2.8% growth.

It wasn’t all sunshine. Comparable sales fell 0.3% in the quarter, dragged down by soft performance in February due to bad weather. Still, the company has seen steady demand for tools and supplies tied to smaller-scale home projects, even as big-ticket renovations remain tepid. Analysts at Morgan Stanley noted that while spring weather is driving improvement, “large remodeling projects remain anemic.”

Helping offset some of that softness is Home Depot’s acquisition of SRS Distribution, which has strengthened its reach with professional customers. Company executives said that business is performing above expectations - a bright spot in a sector where many peers are trimming forecasts and warning about macro uncertainty.

Supply Chains and Staying Power

Trade uncertainty remains a live wire for retailers. Trump’s newly announced 90-day agreement with China, which reduces certain tariffs from 145% to 30%, could lead suppliers to rethink their plans once again. For companies with tight margins and global supply chains, these shifts are more than a policy headache - they’re a pricing problem.

But for Home Depot, the story right now is less about reacting to tariffs and more about proving that a well-insulated supply chain can be a competitive advantage. And while others are still adjusting, Home Depot seems content to stick to its blueprint.