The Home Depot, Inc. stock research
FY2023 Q3
The Home Depot (HD) Gross Margin — Quarter Ended Oct 29, 2023
Revenue and gross profit both decreased compared to the prior quarter and the same quarter last year, while cost of revenue declined proportionally less. Gross margin improved slightly from the prior quarter but weakened relative to the year-ago period.
Gross margin takeaway
Quarter ended Oct 29, 2023 · FY2023 Q3
Revenue and gross profit both decreased compared to the prior quarter and the same quarter last year, while cost of revenue declined proportionally less. Gross margin improved slightly from the prior quarter but weakened relative to the year-ago period.
- The gross margin improvement from the prior quarter was driven by a lower cost of revenue relative to revenue, as cost declined less than revenue. The year-over-year weakening reflects a slightly higher cost of revenue share.
- Compared to the prior quarter, revenue and gross profit were lower, but gross margin was higher. Versus the same quarter last year, revenue, gross profit, and gross margin were all lower.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
33.8%
Gross profit
$12.7B
Revenue
$37.7B
Cost of revenue
$25.0B
Quarter-over-quarter change
+0.8 pts
Year-over-year change
-0.2 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% |
| Oct 29, 2023 | $37.7B | $12.7B | $25.0B | 33.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 30, 2023
+0.8 pts
Year-over-year change
Oct 30, 2022
-0.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improvement from the prior quarter was driven by a lower cost of revenue relative to revenue, as cost declined less than revenue. The year-over-year weakening reflects a slightly higher cost of revenue share.
Compared to the prior quarter, revenue and gross profit were lower, but gross margin was higher. Versus the same quarter last year, revenue, gross profit, and gross margin were all lower.
Monitor the trajectory of cost of revenue relative to revenue, as its proportion influences gross margin direction.