The Home Depot, Inc. stock research
FY2023 Q2
The Home Depot (HD) Gross Margin — Quarter Ended Jul 30, 2023
Revenue and gross profit both decreased compared to the same quarter last year, while cost of revenue also declined. Gross margin weakened slightly from the prior quarter but remained broadly stable versus the year-ago period.
Gross margin takeaway
Quarter ended Jul 30, 2023 · FY2023 Q2
Revenue and gross profit both decreased compared to the same quarter last year, while cost of revenue also declined. Gross margin weakened slightly from the prior quarter but remained broadly stable versus the year-ago period.
- The relationship between revenue and cost of revenue drove gross profit lower year over year, with the decline in revenue outpacing the reduction in cost of revenue. Sequentially, revenue increased while cost of revenue rose at a faster rate, leading to a slight gross margin compression.
- Compared to the prior quarter, revenue was higher but gross margin was lower, indicating that cost of revenue grew more quickly than revenue. Versus the same quarter last year, both revenue and gross profit were lower, while gross margin was nearly unchanged.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
33.0%
Gross profit
$14.2B
Revenue
$42.9B
Cost of revenue
$28.8B
Quarter-over-quarter change
-0.7 pts
Year-over-year change
-0.1 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jan 29, 2023 | $35.8B | $11.9B | $23.9B | 33.3% |
| Apr 30, 2023 | $37.3B | $12.6B | $24.7B | 33.7% |
| Jul 30, 2023 | $42.9B | $14.2B | $28.8B | 33.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Apr 30, 2023
-0.7 pts
Year-over-year change
Jul 31, 2022
-0.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The relationship between revenue and cost of revenue drove gross profit lower year over year, with the decline in revenue outpacing the reduction in cost of revenue. Sequentially, revenue increased while cost of revenue rose at a faster rate, leading to a slight gross margin compression.
Compared to the prior quarter, revenue was higher but gross margin was lower, indicating that cost of revenue grew more quickly than revenue. Versus the same quarter last year, both revenue and gross profit were lower, while gross margin was nearly unchanged.
Monitor the trajectory of cost of revenue relative to revenue, as its faster sequential growth compressed gross margin.