10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 29, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 1-8207

THE HOME DEPOT, INC.

(Exact name of registrant as specified in its charter)

Delaware	95-3261426
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2455 Paces Ferry Road
Atlanta,	Georgia	30339
(Address of principal executive offices)		(Zip Code)

(770) 433-8211

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.05 Par Value Per Share	HD	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒         Accelerated filer ☐      Non-accelerated filer ☐     Smaller reporting company ☐     Emerging growth company ☐    

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

995,261,844 shares of common stock, $0.05 par value, outstanding as of November 14, 2023

TABLE OF CONTENTS

Commonly Used or Defined Terms		ii
Forward-Looking Statements		iii
PART I – FINANCIAL INFORMATION		1
Item 1.	Financial Statements.	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Earnings	2
	Consolidated Statements of Comprehensive Income	3
	Consolidated Statements of Stockholders' Equity	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
	Note 1. Summary of Significant Accounting Policies	6
	Note 2. Net Sales	7
	Note 3. Property and Leases	8
	Note 4. Debt and Derivative Instruments	9
	Note 5. Stockholders' Equity	10
	Note 6. Fair Value Measurements	10
	Note 7. Weighted Average Common Shares	11
	Note 8. Contingencies	12
	Report of Independent Registered Public Accounting Firm	13
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	21
Item 4.	Controls and Procedures.	21
PART II – OTHER INFORMATION		21
Item 1.	Legal Proceedings.	21
Item 1A.	Risk Factors.	22
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.	22
Item 5.	Other Information.	22
Item 6.	Exhibits.	23
SIGNATURES		24

Fiscal Q3 2023 Form 10-Q i

COMMONLY USED OR DEFINED TERMS

Term	Definition
ASU	Accounting Standards Update
Comparable sales	As defined in the Results of Operations section of MD&A
Exchange Act	Securities Exchange Act of 1934, as amended
FASB	Financial Accounting Standards Board
fiscal 2022	Fiscal year ended January 29, 2023
fiscal 2023	Fiscal year ending January 28, 2024
GAAP	U.S. generally accepted accounting principles
MD&A	Management's Discussion and Analysis of Financial Condition and Results of Operations
NOPAT	Net operating profit after tax
Restoration Plans	Home Depot FutureBuilder Restoration Plan and HD Supply Restoration Plan
ROIC	Return on invested capital
SEC	Securities and Exchange Commission
Securities Act	Securities Act of 1933, as amended
SG&A	Selling, general and administrative
2022 Form 10-K	Annual Report on Form 10-K for fiscal 2022 as filed with the SEC on March 15, 2023

Fiscal Q3 2023 Form 10-Q ii

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FORWARD-LOOKING STATEMENTS

Certain statements contained herein, as well as in other filings we make with the SEC and other written and oral information we release, regarding our performance or other events or developments in the future constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may relate to, among other things, the demand for our products and services; net sales growth; comparable sales; the effects of competition; our brand and reputation; implementation of store, interconnected retail, supply chain and technology initiatives; inventory and in-stock positions; the state of the economy; the state of the housing and home improvement markets; the state of the credit markets, including mortgages, home equity loans, and consumer credit; the impact of tariffs; issues related to the payment methods we accept; demand for credit offerings; management of relationships with our associates, potential associates, suppliers and service providers; cost and availability of labor; costs of fuel and other energy sources; international trade disputes, natural disasters, climate change, public health issues, cybersecurity events, military conflicts or acts of war, supply chain disruptions, and other business interruptions that could compromise data privacy or disrupt operation of our stores, distribution centers and other facilities, our ability to operate or access communications, financial or banking systems, or supply or delivery of, or demand for, our products or services; our ability to address expectations regarding environmental, social and governance matters and meet related goals; continuation or suspension of share repurchases; net earnings performance; earnings per share; future dividends; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; changes in interest rates; changes in foreign currency exchange rates; commodity or other price inflation and deflation; our ability to issue debt on terms and at rates acceptable to us; the impact and expected outcome of investigations, inquiries, claims, and litigation, including compliance with related settlements; the challenges of international operations; the adequacy of insurance coverage; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of legal and regulatory changes, including changes to tax laws and regulations; store openings and closures; financial outlook; and the impact of acquired companies on our organization and the ability to recognize the anticipated benefits of any acquisitions.

Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events. You should not rely on our forward-looking statements. These statements are not guarantees of future performance and are subject to future events, risks and uncertainties – many of which are beyond our control, dependent on the actions of third parties, or currently unknown to us – as well as potentially inaccurate assumptions that could cause actual results to differ materially from our historical experience and our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Part II, Item 1A, Risk Factors and elsewhere in this report and also as may be described from time to time in future reports we file with the SEC. You should read such information in conjunction with our consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report. There also may be other factors that we cannot anticipate or that are not described herein, generally because we do not currently perceive them to be material. Such factors could cause results to differ materially from our expectations. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our filings with the SEC and in our other public statements.

Fiscal Q3 2023 Form 10-Q iii

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

THE HOME DEPOT, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

in millions, except per share data	October 29, 2023		January 29, 2023
Assets
Current assets:
Cash and cash equivalents	$	2,058	$	2,757
Receivables, net	3,932		3,317
Merchandise inventories	22,805		24,886
Other current assets	1,887		1,511
Total current assets	30,682		32,471
Net property and equipment	25,735		25,631
Operating lease right-of-use assets	7,071		6,941
Goodwill	7,937		7,444
Other assets	4,152		3,958
Total assets	$	75,577	$	76,445
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	11,478	$	11,443
Accrued salaries and related expenses	2,034		1,991
Sales taxes payable	590		528
Deferred revenue	2,784		3,064
Income taxes payable	304		50
Current installments of long-term debt	1,362		1,231
Current operating lease liabilities	1,026		945
Other accrued expenses	3,994		3,858
Total current liabilities	23,572		23,110
Long-term debt, excluding current installments	40,567		41,962
Long-term operating lease liabilities	6,300		6,226
Deferred income taxes	753		1,019
Other long-term liabilities	2,955		2,566
Total liabilities	74,147		74,883
Contingencies (Note 8)
Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,796 shares at October 29, 2023 and 1,794 shares at January 29, 2023; outstanding: 996 shares at October 29, 2023 and 1,016 shares at January 29, 2023	90		90
Paid-in capital	12,927		12,592
Retained earnings	82,934		76,896
Accumulated other comprehensive loss	(662)		(718)
Treasury stock, at cost, 800 shares at October 29, 2023 and 778 shares at January 29, 2023	(93,859)		(87,298)
Total stockholders’ equity	1,430		1,562
Total liabilities and stockholders’ equity	$	75,577	$	76,445

—————

See accompanying notes to consolidated financial statements.

Fiscal Q3 2023 Form 10-Q 1

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THE HOME DEPOT, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

	Three Months Ended				Nine Months Ended
in millions, except per share data	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Net sales	$	37,710	$	38,872	$	117,883	$	121,572
Cost of sales	24,972		25,648		78,431		80,720
Gross profit	12,738		13,224		39,452		40,852
Operating expenses:
Selling, general and administrative	6,649		6,468		19,919		19,735
Depreciation and amortization	683		608		1,987		1,830
Total operating expenses	7,332		7,076		21,906		21,565
Operating income	5,406		6,148		17,546		19,287
Interest and other (income) expense:
Interest income and other, net	(49)		(7)		(123)		(12)
Interest expense	487		413		1,430		1,166
Interest and other, net	438		406		1,307		1,154
Earnings before provision for income taxes	4,968		5,742		16,239		18,133
Provision for income taxes	1,158		1,403		3,897		4,390
Net earnings	$	3,810	$	4,339	$	12,342	$	13,743
Basic weighted average common shares	996		1,020		1,002		1,024
Basic earnings per share	$	3.83	$	4.25	$	12.32	$	13.42
Diluted weighted average common shares	999		1,023		1,005		1,028
Diluted earnings per share	$	3.81	$	4.24	$	12.28	$	13.37

—————

See accompanying notes to consolidated financial statements.

Fiscal Q3 2023 Form 10-Q 2

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THE HOME DEPOT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited) 

	Three Months Ended				Nine Months Ended
in millions	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Net earnings	$	3,810	$	4,339	$	12,342	$	13,743
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(196)		(187)		51		(158)
Cash flow hedges	1		3		5		6
Total other comprehensive income (loss), net of tax	(195)		(184)		56		(152)
Comprehensive income	$	3,615	$	4,155	$	12,398	$	13,591

—————

See accompanying notes to consolidated financial statements.

Fiscal Q3 2023 Form 10-Q 3

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THE HOME DEPOT, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited) 

	Three Months Ended				Nine Months Ended
in millions	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Common Stock:
Balance at beginning of period	$	90	$	90	$	90	$	90
Shares issued under employee stock plans, net	—		—		—		—
Balance at end of period	90		90		90		90
Paid-in Capital:
Balance at beginning of period	12,842		12,309		12,592		12,132
Shares issued under employee stock plans, net	11		(2)		46		(21)
Stock-based compensation expense	74		78		289		274
Balance at end of period	12,927		12,385		12,927		12,385
Retained Earnings:
Balance at beginning of period	81,213		73,074		76,896		67,580
Net earnings	3,810		4,339		12,342		13,743
Cash dividends	(2,089)		(1,946)		(6,304)		(5,856)
Balance at end of period	82,934		75,467		82,934		75,467
Accumulated Other Comprehensive Income (Loss):
Balance at beginning of period	(467)		(672)		(718)		(704)
Foreign currency translation adjustments, net of tax	(196)		(187)		51		(158)
Cash flow hedges, net of tax	1		3		5		6
Balance at end of period	(662)		(856)		(662)		(856)
Treasury Stock:
Balance at beginning of period	(92,343)		(84,564)		(87,298)		(80,794)
Repurchases of common stock	(1,516)		(1,224)		(6,561)		(4,994)
Balance at end of period	(93,859)		(85,788)		(93,859)		(85,788)
Total stockholders' equity	$	1,430	$	1,298	$	1,430	$	1,298

—————

See accompanying notes to consolidated financial statements.

Fiscal Q3 2023 Form 10-Q 4

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THE HOME DEPOT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
in millions	October 29, 2023		October 30, 2022
Cash Flows from Operating Activities:
Net earnings	$	12,342	$	13,743
Reconciliation of net earnings to net cash provided by operating activities:
Depreciation and amortization	2,415		2,216
Stock-based compensation expense	300		286
Changes in receivables, net	(538)		(312)
Changes in merchandise inventories	2,131		(3,748)
Changes in other current assets	(365)		(568)
Changes in accounts payable and accrued expenses	187		(1,568)
Changes in deferred revenue	(276)		(413)
Changes in income taxes payable	252		30
Changes in deferred income taxes	(310)		129
Other operating activities	301		226
Net cash provided by operating activities	16,439		10,021
Cash Flows from Investing Activities:
Capital expenditures	(2,368)		(2,216)
Payments for businesses acquired, net	(795)		—
Other investing activities	15		(29)
Net cash used in investing activities	(3,148)		(2,245)
Cash Flows from Financing Activities:
Repayments of short-term debt, net	—		(1,035)
Proceeds from long-term debt, net of discounts	—		6,942
Repayments of long-term debt	(1,200)		(2,423)
Repurchases of common stock	(6,465)		(5,136)
Proceeds from sales of common stock	192		146
Cash dividends	(6,304)		(5,856)
Other financing activities	(146)		(185)
Net cash used in financing activities	(13,923)		(7,547)
Change in cash and cash equivalents	(632)		229
Effect of exchange rate changes on cash and cash equivalents	(67)		(110)
Cash and cash equivalents at beginning of period	2,757		2,343
Cash and cash equivalents at end of period	$	2,058	$	2,462
Supplemental Disclosures:
Cash paid for interest, net of interest capitalized	$	1,504	$	1,160
Cash paid for income taxes	3,817		4,173

—————

See accompanying notes to consolidated financial statements.

Fiscal Q3 2023 Form 10-Q 5

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THE HOME DEPOT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

The Home Depot, Inc., together with its subsidiaries (the “Company,” “Home Depot,” “we,” “our” or “us”), is a home improvement retailer that sells a wide assortment of building materials, home improvement products, lawn and garden products, décor items, and facilities maintenance, repair and operations products, in stores and online. We also provide a number of services, including home improvement installation services and tool equipment rental. We operate in the U.S. (including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam), Canada, and Mexico, each representing one of our three operating segments, which we aggregate into one reportable segment due to the similar nature of their operations and economic characteristics.

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2022 Form 10-K.

There were no significant changes to our significant accounting policies as disclosed in the 2022 Form 10-K.

Recently Adopted Accounting Pronouncements

ASU No. 2022-04. In September 2022, the FASB issued ASU No. 2022-04, “Liabilities—Supplier Finance Programs (Topic 405-50): Disclosure of Supplier Finance Program Obligations,” to enhance the transparency of supplier finance programs used by an entity in connection with the purchase of goods and services. The standard requires entities that use supplier finance programs to disclose the key terms, including a description of payment terms, the confirmed amount outstanding under the program at the end of each reporting period, a description of where those obligations are presented on the balance sheet, and an annual rollforward, including the amount of obligations confirmed and the amount paid during the period. The guidance does not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs. ASU No. 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the required rollforward information, which is effective for fiscal years beginning after December 15, 2023. On January 30, 2023, we adopted ASU No. 2022-04 with no impact to our consolidated financial condition, results of operations, or cash flows.

We have a supplier finance program whereby we have entered into payment processing agreements with several financial institutions. Under these agreements, the financial institutions act as our paying agents with respect to accounts payable due to certain suppliers. Participating suppliers may, at their sole discretion, elect to receive payment for one or more of our payment obligations, prior to their scheduled due dates, at a discounted price from participating financial institutions. We are not a party to the agreements between the participating financial institutions and the suppliers in connection with the program, and our rights and obligations to our suppliers are not impacted. We do not reimburse suppliers for any costs they incur for participation in the program. We have not pledged any assets as security or provided any guarantees as part of the program. We have no economic interest in our suppliers’ decisions to participate in the program. Our responsibility is limited to making payment to the respective financial institution according to the terms originally negotiated with the supplier, regardless of whether the supplier elects to receive early payment from the financial institution.

The payment terms we negotiate with our suppliers are consistent, irrespective of whether a supplier participates in the program. Our current payment terms with a majority of our suppliers generally range from 30 to 60 days, which we deem to be commercially reasonable. Our outstanding payment obligations under our supplier finance program were $309 million at October 29, 2023 and $480 million at January 29, 2023, and are recorded within accounts payable on the consolidated balance sheets. The associated payments are included in operating activities within the consolidated statements of cash flows.

Fiscal Q3 2023 Form 10-Q 6

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ASU No. 2020-04. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate discontinued as a result of reference rate reform. ASU No. 2020-04 is effective as of March 12, 2020 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. This guidance was subsequently amended by ASU No. 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848,” which was effective upon issuance in December 2022 and extended the temporary relief provided by Topic 848 through December 31, 2024.

During the second quarter of fiscal 2023, we amended our existing fixed-to-variable interest rate swap agreements, which were designated as fair value hedges, to transition the variable component of such agreements from LIBOR to the Secured Overnight Financing Rate (“SOFR”). Concurrent with these amendments, we elected certain of the optional expedients provided in Topic 848, which allow us to maintain our designation of fair value hedge accounting and application of the shortcut method for these agreements. The adoption of this guidance did not have a material impact on our consolidated financial condition, results of operations, or cash flows.

Recently Issued Accounting Pronouncements

Recent accounting pronouncements pending adoption are either not applicable or are not expected to have a material impact on our consolidated financial condition, results of operations, or cash flows.

2.NET SALES

The following table presents net sales, classified by geography:

	Three Months Ended				Nine Months Ended
in millions	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Net sales – in the U.S.	$	34,544	$	35,784	$	108,242	$	111,834
Net sales – outside the U.S.	3,166		3,088		9,641		9,738
Net sales	$	37,710	$	38,872	$	117,883	$	121,572

The following table presents net sales by products and services:

	Three Months Ended				Nine Months Ended
in millions	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Net sales – products	$	36,156	$	37,448	$	113,405	$	117,261
Net sales – services	1,554		1,424		4,478		4,311
Net sales	$	37,710	$	38,872	$	117,883	$	121,572

The following table presents major product lines and the related merchandising departments (and related services):

Major Product Line	Merchandising Departments
Building Materials	Building Materials, Electrical/Lighting, Lumber, Millwork, and Plumbing
Décor	Appliances, Décor/Storage, Flooring, Kitchen and Bath, and Paint
Hardlines	Hardware, Indoor Garden, Outdoor Garden, and Tools

Fiscal Q3 2023 Form 10-Q 7

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The following table presents net sales by major product line (and related services):

	Three Months Ended				Nine Months Ended
in millions	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Building Materials	$	14,744	$	15,343	$	44,214	$	46,095
Décor	12,653		13,070		38,315		40,040
Hardlines	10,313		10,459		35,354		35,437
Net sales	$	37,710	$	38,872	$	117,883	$	121,572

Deferred Revenue

For products and services sold in stores or online, payment is typically due at the point of sale. When we receive payment from customers before the customer has taken possession of the merchandise or the service has been performed, the amount received is recorded as deferred revenue until the sale or service is complete. Such performance obligations are part of contracts with expected original durations of typically three months or less. As of October 29, 2023 and January 29, 2023, deferred revenue for products and services was $1.8 billion and $2.0 billion, respectively.

We further record deferred revenue for the sale of gift cards and recognize the associated revenue upon the redemption of those gift cards, which generally occurs within six months of gift card issuance. As of October 29, 2023 and January 29, 2023, our performance obligations for unredeemed gift cards were $1.0 billion and $1.1 billion, respectively. Gift card breakage income, which is our estimate of the portion of our outstanding gift card balance not expected to be redeemed, was immaterial during the three and nine months ended October 29, 2023 and October 30, 2022.

3.PROPERTY AND LEASES

Net Property and Equipment

Net property and equipment included accumulated depreciation and finance lease amortization of $28.1 billion as of October 29, 2023 and $26.6 billion as of January 29, 2023.

Leases

The following table presents the consolidated balance sheet classification related to operating and finance leases:

in millions	Consolidated Balance Sheet Classification	October 29, 2023		January 29, 2023
Assets:
Operating lease assets	Operating lease right-of-use assets	$	7,071	$	6,941
Finance lease assets (1)	Net property and equipment	2,860		2,899
Total lease assets		$	9,931	$	9,840
Liabilities:
Current:
Operating lease liabilities	Current operating lease liabilities	$	1,026	$	945
Finance lease liabilities	Current installments of long-term debt	262		231
Long-term:
Operating lease liabilities	Long-term operating lease liabilities	6,300		6,226
Finance lease liabilities	Long-term debt, excluding current installments	3,032		3,054
Total lease liabilities		$	10,620	$	10,456

—————

(1) Finance lease assets are recorded net of accumulated amortization of $1.2 billion as of both October 29, 2023 and January 29, 2023.

Fiscal Q3 2023 Form 10-Q 8

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The following table presents supplemental non-cash information related to leases:

	Nine Months Ended
in millions	October 29, 2023		October 30, 2022
Lease assets obtained in exchange for new operating lease liabilities	$	791	$	1,308
Lease assets obtained in exchange for new finance lease liabilities	261		234

4.DEBT AND DERIVATIVE INSTRUMENTS

Short-Term Debt

We have a commercial paper program that allows for borrowings up to $5.0 billion. In connection with our program, we have back-up credit facilities with a consortium of banks for borrowings up to $5.0 billion, which consist of a five-year $3.5 billion credit facility scheduled to expire in July 2027 and a 364-day $1.5 billion credit facility scheduled to expire in July 2024. In July 2023, we completed the renewal of our 364-day $1.5 billion credit facility, extending the maturity from July 2023 to July 2024. All of our short-term borrowings in the first nine months of fiscal 2023 were under our commercial paper program, and the maximum amount outstanding at any time was $1.5 billion. At both October 29, 2023 and January 29, 2023, there were no outstanding borrowings under our commercial paper program.

Long-Term Debt

We did not have any new issuances of senior notes during the first nine months of fiscal 2023. In April 2023, we repaid our $1.0 billion 2.70% senior notes at maturity.

Derivative Instruments and Hedging Activities

We had outstanding interest rate swap agreements with combined notional amounts of $5.4 billion at both October 29, 2023 and January 29, 2023. These agreements are accounted for as fair value hedges that swap fixed for variable rate interest to hedge changes in the fair values of certain senior notes. At October 29, 2023 and January 29, 2023, the fair values of these agreements totaled $1.1 billion and $778 million, respectively, all of which are recognized within other long-term liabilities on the consolidated balance sheets.

All of our interest rate swap agreements are designated as fair value hedges and meet the shortcut method requirements under GAAP. Accordingly, the changes in the fair values of these agreements offset the changes in the fair value of the hedged long-term debt.

During the second quarter of fiscal 2023, we amended all of our interest rate swap agreements to replace LIBOR with SOFR and concurrently adopted certain expedients provided in Topic 848. These amendments did not result in any change to our application of hedge accounting or have a material impact to our consolidated financial statements. See Note 1 for further discussion.

There were no material changes to any other hedging arrangements disclosed in our 2022 Form 10-K, and all related activity was immaterial for the periods presented within this document.

Collateral. We generally enter into master netting arrangements, which are designed to reduce credit risk by permitting net settlement of transactions with the same counterparty. To further limit our credit risk, we enter into collateral security arrangements that provide for collateral to be received or posted when the net fair value of certain derivative instruments exceeds or falls below contractually established thresholds. The cash collateral posted by the Company related to derivative instruments under our collateral security arrangements was $926 million and $634 million as of October 29, 2023 and January 29, 2023, respectively, which was recorded in other current assets on the consolidated balance sheets. We did not hold any cash collateral as of October 29, 2023 or January 29, 2023.

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5. STOCKHOLDERS' EQUITY

Stock Rollforward

The following table presents a reconciliation of the number of shares of our common stock outstanding and cash dividends per share:

shares in millions	Three Months Ended				Nine Months Ended
	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Common stock:
Shares at beginning of period	1,796		1,793		1,794		1,792
Shares issued under employee stock plans, net	—		—		2		1
Shares at end of period	1,796		1,793		1,796		1,793
Treasury stock:
Shares at beginning of period	(795)		(769)		(778)		(757)
Repurchases of common stock	(5)		(4)		(22)		(16)
Shares at end of period	(800)		(773)		(800)		(773)
Shares outstanding at end of period	996		1,020		996		1,020
Cash dividends per share	$	2.09	$	1.90	$	6.27	$	5.70

Share Repurchases

In August 2023, our Board of Directors approved a $15.0 billion share repurchase authorization that replaced the previous authorization of $15.0 billion, which was approved in August 2022. This new authorization does not have a prescribed expiration date. As of October 29, 2023, approximately $13.8 billion of the $15.0 billion share repurchase authorization remained available.

The following table presents information about our repurchases of common stock, all of which were completed through open market purchases:

in millions	Three Months Ended				Nine Months Ended
	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Total number of shares repurchased	5		4		22		16
Total cost of shares repurchased (1)	$	1,516	$	1,224	$	6,561	$	4,994

—————

(1) Effective January 1, 2023, the Company’s share repurchases are subject to a 1% excise tax as a result of the Inflation Reduction Act of 2022. Excise taxes incurred on share repurchases represent direct costs of the repurchase and are recorded as a part of the cost basis of the shares within treasury stock.

The cost of shares repurchased may differ from the repurchases of common stock amounts in the consolidated statements of cash flows due to unsettled share repurchases at the end of a period and excise taxes incurred on share repurchases.

6.FAIR VALUE MEASUREMENTS

The fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, rather than the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:

•Level 1: observable inputs such as quoted prices in active markets for identical assets or liabilities;

•Level 2: inputs other than quoted prices in active markets in Level 1 that are either directly or indirectly observable; and

•Level 3: unobservable inputs for which little or no market data exists, therefore requiring management judgment to develop the Company’s own models with estimates and assumptions.

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Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the assets and liabilities that are measured at fair value on a recurring basis:

	October 29, 2023		January 29, 2023
in millions	Fair Value (Level 2)		Fair Value (Level 2)
Derivative agreements – assets	$	—	$	—
Derivative agreements – liabilities	(1,073)		(778)
Total	$	(1,073)	$	(778)

The fair values of our derivative instruments are determined using an income approach and Level 2 inputs, which primarily include the respective interest rate forward curves and discount rates. Our derivative instruments are discussed further in Note 4.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Long-lived assets, goodwill, and other intangible assets are subject to nonrecurring fair value measurement for the assessment of impairment.

During the third quarter of fiscal 2023, we completed our annual assessment of the recoverability of goodwill for our U.S., Canada, and Mexico reporting units, using a quantitative approach. The quantitative test for goodwill impairment was performed by determining the fair value of the reporting units using a combination of discounted cash flow and market-based approaches. The results of our quantitative analysis indicated that the fair value of each of the reporting units substantially exceeded its respective carrying value, including goodwill. Additionally, during the third quarter of fiscal 2023, we completed our annual assessment of the recoverability of our indefinite-lived intangibles based on quantitative factors and concluded no impairment losses should be recognized.

We did not have any material assets or liabilities that were measured at fair value on a nonrecurring basis during the three and nine months ended October 29, 2023 or October 30, 2022.

Other Fair Value Disclosures

The carrying amounts of cash and cash equivalents, receivables, and accounts payable approximate fair value due to their short-term nature. The following table presents the aggregate fair values and carrying values of our senior notes:

	October 29, 2023				January 29, 2023
in millions	Fair Value (Level 1)		Carrying Value		Fair Value (Level 1)		Carrying Value
Senior notes	$	33,135	$	38,635	$	38,537	$	39,908

7.WEIGHTED AVERAGE COMMON SHARES

The following table presents the reconciliation of our basic to diluted weighted average common shares as well as the number of anti-dilutive securities excluded from diluted weighted average common shares:

in millions	Three Months Ended		Nine Months Ended
	October 29, 2023	October 30, 2022	October 29, 2023	October 30, 2022
Basic weighted average common shares	996	1,020	1,002	1,024
Effect of potentially dilutive securities (1)	3	3	3	4
Diluted weighted average common shares	999	1,023	1,005	1,028
Anti-dilutive securities excluded from diluted weighted average common shares	1	1	1	1

—————

(1)    Represents the dilutive impact of stock-based awards.

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8.CONTINGENCIES

We are involved in litigation arising in the normal course of business. In management’s opinion, any such litigation is not expected to have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

The Home Depot, Inc.:

Results of Review of Interim Financial Information

We have reviewed the consolidated balance sheet of The Home Depot, Inc. and its subsidiaries (the “Company”) as of October 29, 2023, the related consolidated statements of earnings, comprehensive income and stockholders’ equity for the three-month and nine-month periods ended October 29, 2023 and October 30, 2022, the related consolidated statements of cash flows for the nine-month periods ended October 29, 2023 and October 30, 2022, and the related notes (collectively, the “consolidated interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of the Company as of January 29, 2023, and the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows for the fiscal year then ended (not presented herein); and in our report dated March 15, 2023, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of January 29, 2023 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ KPMG LLP

Atlanta, Georgia

November 20, 2023

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion provides an analysis of the Company’s financial condition and results of operations from management's perspective and should be read in conjunction with the consolidated financial statements and related notes included in this report and in the 2022 Form 10-K and with our MD&A included in the 2022 Form 10-K.

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Executive Summary	14
Results of Operations	15
Liquidity and Capital Resources	19
Critical Accounting Estimates	21

EXECUTIVE SUMMARY

The following table presents quarter-to-date and year-to-date highlights of our financial performance:

dollars in millions, except per share data	Three Months Ended				Nine Months Ended
	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Net sales	$	37,710	$	38,872	$	117,883	$	121,572
Net earnings	$	3,810	$	4,339	$	12,342	$	13,743
Diluted earnings per share	$	3.81	$	4.24	$	12.28	$	13.37
Net cash provided by operating activities					$	16,439	$	10,021
Proceeds from long-term debt, net of discounts					$	—	$	6,942
Repayments of long-term debt					$	1,200	$	2,423

We reported net sales of $37.7 billion in the third quarter of fiscal 2023. Net earnings were $3.8 billion, or $3.81 per diluted share. For the first nine months of fiscal 2023, net sales were $117.9 billion and net earnings were $12.3 billion, or $12.28 per diluted share.

During the third quarter of fiscal 2023, we opened five new stores in the U.S. and two new stores in Mexico, and we had no store closures, resulting in a store count of 2,333 at the end of the quarter. As of October 29, 2023, a total of 319 stores, or 13.7% of our total store count, were located in Canada and Mexico. For the third quarter of fiscal 2023, sales per retail square foot were $595.71, and for the first nine months of fiscal 2023, sales per retail square foot were $623.17. Our inventory turnover ratio was 4.3 times at the end of the third quarter for both fiscal 2023 and fiscal 2022.

We generated $16.4 billion of cash flow from operations during the first nine months of fiscal 2023. This cash flow, together with cash on hand, was used to fund cash payments of $6.5 billion for share repurchases and $6.3 billion for dividends. In addition, we funded $2.4 billion in capital expenditures and repaid $1.2 billion of long-term debt during the first nine months of fiscal 2023. In February 2023, we announced a 10% increase in our quarterly cash dividend to $2.09 per share.

Our ROIC for the trailing twelve-month period was 38.7% at the end of the third quarter of fiscal 2023 compared to 43.3% at the end of the third quarter of fiscal 2022. The decrease in ROIC was primarily driven by lower operating income along with an increase in average long-term debt over the respective periods. See the Non-GAAP Financial Measures section below for our definition and calculation of ROIC, as well as a reconciliation of NOPAT, a non-GAAP financial measure, to net earnings (the most comparable GAAP financial measure).

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RESULTS OF OPERATIONS

The following table presents the percentage relationship between net sales and major categories in our consolidated statements of earnings.

FISCAL 2023 AND FISCAL 2022 THREE MONTH COMPARISONS

	Three Months Ended
	October 29, 2023				October 30, 2022
dollars in millions	$		% of Net Sales		$		% of Net Sales
Net sales	$	37,710			$	38,872
Gross profit	12,738		33.8	%	13,224		34.0	%
Operating expenses:
Selling, general and administrative	6,649		17.6		6,468		16.6
Depreciation and amortization	683		1.8		608		1.6
Total operating expenses	7,332		19.4		7,076		18.2
Operating income	5,406		14.3		6,148		15.8
Interest and other (income) expense:
Interest income and other, net	(49)		(0.1)		(7)		—
Interest expense	487		1.3		413		1.1
Interest and other, net	438		1.2		406		1.0
Earnings before provision for income taxes	4,968		13.2		5,742		14.8
Provision for income taxes	1,158		3.1		1,403		3.6
Net earnings	$	3,810	10.1	%	$	4,339	11.2	%

—————

Note: Certain percentages may not sum to totals due to rounding.

	Three Months Ended
Selected financial and sales data:	October 29, 2023			October 30, 2022			% Change
Comparable sales (% change)	(3.1)		%	4.3		%	N/A
Comparable customer transactions (% change) (1)	(2.7)		%	(4.4)		%	N/A
Comparable average ticket (% change) (1)	(0.3)		%	8.8		%	N/A
Customer transactions (in millions) (1)	399.8			409.8			(2.4)	%
Average ticket (1) (2)	$	89.36		$	89.67		(0.3)	%
Sales per retail square foot (1) (3)	$	595.71		$	618.50		(3.7)	%
Diluted earnings per share	$	3.81		$	4.24		(10.1)	%

—————

(1)Does not include results for HD Supply.

(2)Average ticket represents the average price paid per transaction and is used by management to monitor the performance of the Company, as it represents a primary driver in measuring sales performance.

(3)Sales per retail square foot represents annualized sales divided by retail store square footage. Sales per retail square foot is a measure of the efficiency of sales based on the total square footage of our stores and is used by management to monitor the performance of the Company’s retail operations as an indicator of the productivity of owned and leased square footage for these retail operations.

Sales

We assess our sales performance by evaluating both net sales and comparable sales.

Net Sales. Net sales for the third quarter of fiscal 2023 were $37.7 billion, a decrease of 3.0% from $38.9 billion for the third quarter of fiscal 2022. The decrease in net sales for the third quarter of fiscal 2023 reflects the impact of a negative comparable sales environment, primarily driven by a decrease in comparable customer transactions as well as the impact from commodity price deflation.

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Online sales, which consist of sales generated through our websites and mobile applications for products picked up at our stores or delivered to customer locations, represented 14.3% of net sales during the third quarter of fiscal 2023 and increased by 4.6% compared to the third quarter of fiscal 2022.

A weaker U.S. dollar positively impacted net sales by $131 million during the third quarter of fiscal 2023.

Comparable Sales. Comparable sales is a measure that highlights the performance of our existing locations and websites by measuring the change in net sales for a period over the comparable prior period of equivalent length. Comparable sales includes sales at all locations, physical and online, open greater than 52 weeks (including remodels and relocations) and excludes closed stores. Retail stores become comparable on the Monday following their 52nd week of operation. Acquisitions are typically included in comparable sales after they have been owned for more than 52 weeks. Comparable sales is intended only as supplemental information and is not a substitute for net sales presented in accordance with GAAP.

Total comparable sales for the third quarter of fiscal 2023 decreased 3.1%, reflecting a 2.7% decrease in comparable customer transactions and a 0.3% decrease in comparable average ticket compared to the third quarter of fiscal 2022. The decrease in comparable customer transactions reflects the impact of macroeconomic factors and moderating home improvement demand. Comparable average ticket reflects U.S. commodity price deflation, which negatively impacted average ticket by approximately 60 basis points, partially offset by demand for new and innovative products.

During the third quarter of fiscal 2023, our Building Materials merchandising department posted positive comparable sales compared to the third quarter of fiscal 2022. All of our other merchandising departments posted negative comparable sales during the third quarter of fiscal 2023 compared to the third quarter of fiscal 2022.

Gross Profit

Gross profit for the third quarter of fiscal 2023 decreased 3.7% to $12.7 billion from $13.2 billion for the third quarter of fiscal 2022. Gross profit as a percentage of net sales, or gross profit margin, was 33.8% for the third quarter of fiscal 2023 compared to 34.0% for the third quarter of fiscal 2022. The decrease in gross profit margin during the third quarter of fiscal 2023 was primarily driven by price stabilization, partially offset by lower supply chain costs.

Operating Expenses

Our operating expenses are composed of SG&A and depreciation and amortization.

Selling, General & Administrative. SG&A for the third quarter of fiscal 2023 increased $181 million, or 2.8%, to $6.6 billion from $6.5 billion for the third quarter of fiscal 2022. As a percentage of net sales, SG&A was 17.6% for the third quarter of fiscal 2023 compared to 16.6% for the third quarter of fiscal 2022, primarily reflecting deleverage from a negative comparable sales environment and previously executed wage investments for hourly associates.

Depreciation and Amortization. Depreciation and amortization for the third quarter of fiscal 2023 increased $75 million, or 12.3%, to $683 million from $608 million for the third quarter of fiscal 2022. As a percentage of net sales, depreciation and amortization was 1.8% for the third quarter of fiscal 2023 compared to 1.6% for the third quarter of fiscal 2022, primarily reflecting increased depreciation expense from ongoing investments in the business and deleverage from a negative comparable sales environment.

Interest and Other, net

Interest and other, net, for the third quarter of fiscal 2023 increased $32 million, or 7.9%, to $438 million from $406 million for the third quarter of fiscal 2022. As a percentage of net sales, interest and other, net was 1.2% for the third quarter of fiscal 2023 compared to 1.0% for the third quarter of fiscal 2022, primarily due to increased variable rate interest on floating rate debt resulting from interest rate swaps, higher average debt balances, and deleverage from a negative comparable sales environment, partially offset by higher interest income.

Provision for Income Taxes

Our combined effective income tax rate was 23.3% for the third quarter of fiscal 2023 compared to 24.4% for the third quarter of fiscal 2022. The decrease in our effective rate was driven by certain discrete tax benefits recognized during the third quarter of fiscal 2023.

Diluted Earnings per Share

Diluted earnings per share were $3.81 for the third quarter of fiscal 2023 compared to $4.24 for the third quarter of fiscal 2022. The decrease in diluted earnings per share was primarily driven by lower net earnings during the third quarter of fiscal 2023, partially offset by lower diluted shares due to share repurchases.

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FISCAL 2023 AND FISCAL 2022 NINE MONTH COMPARISONS

	Nine Months Ended
	October 29, 2023				October 30, 2022
dollars in millions	$		% of Net Sales		$		% of Net Sales
Net sales	$	117,883			$	121,572
Gross profit	39,452		33.5	%	40,852		33.6	%
Operating expenses:
Selling, general and administrative	19,919		16.9		19,735		16.2
Depreciation and amortization	1,987		1.7		1,830		1.5
Total operating expenses	21,906		18.6		21,565		17.7
Operating income	17,546		14.9		19,287		15.9
Interest and other (income) expense:
Interest income and other, net	(123)		(0.1)		(12)		—
Interest expense	1,430		1.2		1,166		1.0
Interest and other, net	1,307		1.1		1,154		0.9
Earnings before provision for income taxes	16,239		13.8		18,133		14.9
Provision for income taxes	3,897		3.3		4,390		3.6
Net earnings	$	12,342	10.5	%	$	13,743	11.3	%

—————

Note: Certain percentages may not sum to totals due to rounding.

	Nine Months Ended
Selected financial and sales data:	October 29, 2023			October 30, 2022			% Change
Comparable sales (% change)	(3.2)		%	4.2		%	N/A
Comparable customer transactions (% change) (1)	(3.2)		%	(5.3)		%	N/A
Comparable average ticket (% change) (1)	—		%	9.7		%	N/A
Customer transactions (in millions) (1)	1,249.8			1,287.9			(3.0)	%
Average ticket (1) (2)	$	90.42		$	90.45		—
Sales per retail square foot (1) (3)	$	623.17		$	646.81		(3.7)	%
Diluted earnings per share	$	12.28		$	13.37		(8.2)	%

—————

(1)Does not include results for HD Supply.

(2)Average ticket represents the average price paid per transaction and is used by management to monitor the performance of the Company, as it represents a primary driver in measuring sales performance.

(3)Sales per retail square foot represents annualized sales divided by retail store square footage. Sales per retail square foot is a measure of the efficiency of sales based on the total square footage of our stores and is used by management to monitor the performance of the Company’s retail operations as an indicator of the productivity of owned and leased square footage for these retail operations.

Sales

We assess our sales performance by evaluating both net sales and comparable sales.

Net Sales. Net sales for the first nine months of fiscal 2023 were $117.9 billion, a decrease of 3.0% from $121.6 billion for the first nine months of fiscal 2022. The decrease in net sales for the first nine months of fiscal 2023 reflects the impact of a negative comparable sales environment, primarily driven by a decrease in comparable customer transactions as well as the impact from lumber price deflation.

Online sales represented 14.4% of net sales during the first nine months of fiscal 2023 and increased by 0.9% compared to the first nine months of fiscal 2022.

A weaker U.S. dollar positively impacted net sales by $145 million for the first nine months of fiscal 2023.

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Comparable Sales. Total comparable sales for the first nine months of fiscal 2023 decreased 3.2%, reflecting a 3.2% decrease in comparable customer transactions and flat comparable average ticket compared to the first nine months of fiscal 2022. The decrease in comparable customer transactions reflects the impact of macroeconomic factors and moderating home improvement demand. Comparable average ticket was primarily impacted by inflation across several product categories along with demand for new and innovative products, offset by U.S. commodity price deflation, which negatively impacted average ticket by approximately 180 basis points, driven primarily by lumber.

During the first nine months of fiscal 2023, four of our 14 merchandising departments—Building Materials, Hardware, Outdoor Garden, and Plumbing—posted positive comparable sales compared to the first nine months of fiscal 2022. All of our other merchandising departments posted negative comparable sales during the first nine months of fiscal 2023 compared to the first nine months of fiscal 2022, with our Lumber department posting a double-digit comparable sales decline primarily resulting from lumber price deflation, partially offset by higher unit sales.

Gross Profit

Gross profit for the first nine months of fiscal 2023 decreased 3.4% to $39.5 billion from $40.9 billion for the first nine months of fiscal 2022. Gross profit as a percentage of net sales, or gross profit margin, was 33.5% for the first nine months of fiscal 2023 compared to 33.6% for the first nine months of fiscal 2022. The decrease in gross profit margin during the first nine months of fiscal 2023 was primarily driven by price stabilization along with pressure from shrink, partially offset by lower supply chain costs and favorable product mix.

Operating Expenses

Our operating expenses are composed of SG&A and depreciation and amortization.

Selling, General & Administrative. SG&A for the first nine months of fiscal 2023 increased $184 million, or 0.9%, to $19.9 billion from $19.7 billion for the first nine months of fiscal 2022. As a percentage of net sales, SG&A was 16.9% for the first nine months of fiscal 2023 compared to 16.2% for the first nine months of fiscal 2022, primarily reflecting deleverage from a negative comparable sales environment along with previously executed wage investments for hourly associates, partially offset by the one-time benefit from the favorable settlement of litigation with a vendor as well as lower incentive compensation.

Depreciation and Amortization. Depreciation and amortization for the first nine months of fiscal 2023 increased $157 million, or 8.6%, to $2.0 billion from $1.8 billion for the first nine months of fiscal 2022. As a percentage of net sales, depreciation and amortization was 1.7% for the first nine months of fiscal 2023 and 1.5% for the first nine months of fiscal 2022, primarily reflecting increased depreciation expense from ongoing investments in the business and deleverage from a negative comparable sales environment.

Interest and Other, net

Interest and other, net for the first nine months of fiscal 2023 increased $153 million, or 13.3%, to $1.3 billion from $1.2 billion for the first nine months of fiscal 2022. As a percentage of net sales, interest and other, net was 1.1% for the first nine months of fiscal 2023 compared to 0.9% for the first nine months of fiscal 2022, primarily due to increased variable rate interest on floating rate debt resulting from interest rate swaps, higher average debt balances, and deleverage from a negative comparable sales environment, partially offset by higher interest income.

Provision for Income Taxes

Our combined effective income tax rate was 24.0% for the first nine months of fiscal 2023 compared to 24.2% for the first nine months of fiscal 2022.

Diluted Earnings per Share

Diluted earnings per share were $12.28 for the first nine months of fiscal 2023, compared to $13.37 for the first nine months of fiscal 2022. The decrease in diluted earnings per share was primarily driven by lower net earnings during the first nine months of fiscal 2023, partially offset by lower diluted shares due to share repurchases.

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NON-GAAP FINANCIAL MEASURES

To provide clarity on our operating performance, we supplement our reporting with certain non-GAAP financial measures. However, this supplemental information should not be considered in isolation or as a substitute for the related GAAP measures. Non-GAAP financial measures presented herein may differ from similar measures used by other companies.

Return on Invested Capital

We believe ROIC is meaningful for investors and management because it measures how effectively we deploy our capital base. We define ROIC as NOPAT, a non-GAAP financial measure, for the most recent twelve-month period, divided by average debt and equity. We define average debt and equity as the average of beginning and ending long-term debt (including current installments) and equity for the most recent twelve-month period.

The following table presents the calculation of ROIC, together with a reconciliation of NOPAT to net earnings (the most comparable GAAP measure):

	Twelve Months Ended
dollars in millions	October 29, 2023			October 30, 2022
Net earnings	$	15,704		$	17,095
Interest and other, net	1,715			1,477
Provision for income taxes	4,879			5,540
Operating income	22,298			24,112
Income tax adjustment (1)	(5,347)			(5,844)
NOPAT	$	16,951		$	18,268
Average debt and equity	$	43,810		$	42,222
ROIC	38.7		%	43.3		%

—————

(1)Income tax adjustment is defined as operating income multiplied by our effective tax rate for the trailing twelve months.

LIQUIDITY AND CAPITAL RESOURCES

At October 29, 2023, we had $2.1 billion in cash and cash equivalents, of which $1.0 billion was held by our foreign subsidiaries. We believe that our current cash position, cash flow generated from operations, funds available from our commercial paper program, and access to the long-term debt capital markets should be sufficient not only for our operating requirements, any required debt payments, and satisfaction of other contractual obligations, but also to enable us to invest in the business, fund dividend payments, and fund any share repurchases through the next several fiscal years. In addition, we believe that we have the ability to obtain alternative sources of financing, if necessary.

Our material cash requirements include contractual and other obligations arising in the normal course of business. These obligations primarily include long-term debt and related interest payments, operating and finance lease obligations, and purchase obligations.

In addition to our cash requirements, we follow a disciplined approach to capital allocation. This approach first prioritizes investing in the business, followed by paying dividends, with the intent of then returning excess cash to shareholders in the form of share repurchases. For fiscal 2023, we plan to invest approximately $3 billion back into the business in the form of capital expenditures, in line with our expectation of approximately two percent of net sales on an annual basis. However, we may adjust our capital expenditures to support the operations of the business, to enhance long-term strategic positioning, or in response to the economic environment, as necessary or appropriate. Capital expenditures were $2.4 billion for the first nine months of fiscal 2023.

In February 2023, we announced a 10% increase in our quarterly cash dividend from $1.90 to $2.09 per share. During the first nine months of fiscal 2023, we paid cash dividends of $6.3 billion to shareholders. We intend to pay a dividend in the future; however, any future dividend is subject to declaration by our Board of Directors based on our earnings, capital requirements, financial condition, and other factors considered relevant by our Board of Directors.

Fiscal Q3 2023 Form 10-Q 19

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In August 2023, our Board of Directors approved a $15.0 billion share repurchase authorization that replaced the previous authorization of $15.0 billion, which was approved in August 2022. This new authorization does not have a prescribed expiration date. As of October 29, 2023, approximately $13.8 billion of the $15.0 billion share repurchase authorization remained available. During the first nine months of fiscal 2023, we had cash payments of $6.5 billion for repurchases of our common stock through open market purchases.

DEBT

We have a commercial paper program that allows for borrowings up to $5.0 billion. In connection with our program, we have back-up credit facilities with a consortium of banks for borrowings up to $5.0 billion, which consist of a five-year $3.5 billion credit facility scheduled to expire in July 2027 and a 364-day $1.5 billion credit facility scheduled to expire in July 2024. In July 2023, we completed the renewal of our 364-day $1.5 billion credit facility, extending the maturity from July 2023 to July 2024. All of our short-term borrowings in the first nine months of fiscal 2023 were under our commercial paper program, and the maximum amount outstanding at any time was $1.5 billion. At October 29, 2023, we had no outstanding borrowings under our commercial paper program, and we were in compliance with all of the covenants contained in our credit facilities, none of which are expected to impact our liquidity or capital resources.

We also issue senior notes from time to time as part of our capital management strategy. We did not have any issuances of senior notes during the first nine months of fiscal 2023. In April 2023, we repaid $1.0 billion of senior notes at maturity.

The indentures governing our senior notes do not generally limit our ability to incur additional indebtedness or require us to maintain financial ratios or specified levels of net worth or liquidity. The indentures governing our notes contain various customary covenants; however, none are expected to impact our liquidity or capital resources. See Note 4 to our consolidated financial statements for further discussion of our debt arrangements.

CASH FLOWS SUMMARY

Operating Activities

Cash flow generated from operations provides us with a significant source of liquidity. Our operating cash flows result primarily from cash received from our customers, offset by cash payments we make for products and services, associate compensation, operations, occupancy costs, and income taxes. Cash provided by or used in operating activities is also subject to changes in working capital. Working capital at any point in time is subject to many variables, including seasonality, inventory management and category expansion, the timing of cash receipts and payments, vendor payment terms, and fluctuations in foreign exchange rates.

Net cash provided by operating activities increased by $6.4 billion in the first nine months of fiscal 2023 compared to the first nine months of fiscal 2022, primarily driven by changes in working capital, slightly offset by a decrease in net earnings. Changes in working capital were primarily driven by lower inventory purchases in the first nine months of fiscal 2023 relative to the first nine months of fiscal 2022, as well as timing of vendor payments.

Investing Activities

Net cash used in investing activities increased by $903 million in the first nine months of fiscal 2023 compared to the first nine months of fiscal 2022, primarily resulting from cash paid for acquired businesses as well as increased capital expenditures during fiscal 2023.

Financing Activities

Net cash used in financing activities in the first nine months of fiscal 2023 primarily reflected $6.5 billion of share repurchases, $6.3 billion of cash dividends paid, and $1.2 billion of repayments of long-term debt. Net cash used in financing activities in the first nine months of fiscal 2022 primarily reflected $5.9 billion of cash dividends paid, $5.1 billion of share repurchases, $2.4 billion of repayments of long-term debt, and $1.0 billion of net repayments of short-term debt, partially offset by $6.9 billion of net proceeds from long-term debt.

Fiscal Q3 2023 Form 10-Q 20

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CRITICAL ACCOUNTING ESTIMATES

During the first nine months of fiscal 2023, there were no changes to our critical accounting estimates or our significant accounting policies as disclosed in the 2022 Form 10-K. Our significant accounting policies are disclosed in Note 1 to our consolidated financial statements.

ADDITIONAL INFORMATION

For information on accounting pronouncements that have impacted or are expected to materially impact our consolidated financial condition, results of operations, or cash flows, see Note 1 to our consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Our exposure to market risk results primarily from fluctuations in interest rates in connection with our long-term debt portfolio. We are also exposed to risks from foreign currency exchange rate fluctuations on the translation of our foreign operations into U.S. dollars and on the purchase of goods by these foreign operations that are not denominated in their local currencies. Additionally, we may experience inflation and deflation related to our purchase and sale of certain commodity products. There have been no material changes to our exposure to market risks, including the types of instruments we use to manage our exposure to such risks, from those disclosed in the 2022 Form 10-K.

Item 4. Controls and Procedures.

Under the direction and with the participation of our Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) and concluded that our disclosure controls and procedures were effective as of October 29, 2023.

We are in the process of an ongoing business transformation initiative, which includes upgrading and migrating certain accounting and finance systems. We plan to continue to migrate additional business processes over the course of the next few years and have modified and will continue to modify the design and implementation of certain internal control processes as the transformation continues.

Except as described above, there were no other changes in our internal control over financial reporting during the fiscal quarter ended October 29, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

Except as set forth below, there were no material changes during the first nine months of fiscal 2023 to our disclosure in Part I, Item 3, “Legal Proceedings” of our 2022 Form 10-K.

SEC regulations require us to disclose certain information about proceedings arising under federal, state or local environmental provisions if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. Pursuant to SEC regulations, the Company uses a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required.

As previously reported, in April 2021 we entered into a civil consent decree with the U.S. Department of Justice, the U.S. Environmental Protection Agency (“EPA”), and the states of Utah, Massachusetts, and Rhode Island. The decree required certain changes to lead-safe work practices in our installation services business and provided for stipulated penalties for failure to perform by our third-party installers. In the first quarter of fiscal 2023, the EPA informed us that it believes we owe certain penalties for violations by our third-party installers of documentation requirements under the decree. We are engaged in discussions with the EPA regarding the basis for the stipulated penalties we allegedly owe under the decree. While we cannot predict the amount of stipulated penalties we may ultimately owe to the EPA under the decree, we do not expect it to have a material adverse effect on our consolidated financial condition, results of operations, or cash flows. Further, we expect to recoup any amount we ultimately owe from corresponding fines we levy against our third-party installers.

Fiscal Q3 2023 Form 10-Q 21

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Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the factors discussed under Part I, Item 1A, “Risk Factors” and elsewhere in the 2022 Form 10-K. These risks and uncertainties could materially and adversely affect our business, consolidated financial condition, results of operations, or cash flows. Our operations could also be affected by additional factors that are not presently known to us or by factors that we currently do not consider material to our business. There have been no material changes in the risk factors discussed in the 2022 Form 10-K.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.

ISSUER PURCHASES OF EQUITY SECURITIES

The following table presents the number and average price of shares purchased in each fiscal month of the third quarter of fiscal 2023:

Period	Total Number of Shares Purchased(1)	Average Price Paid Per Share(1)(3)		Total Number of Shares Purchased as Part of Publicly Announced Program(2)	Dollar Value of Shares that May Yet Be Purchased Under the Program(2)(3)
July 31, 2023 – August 27, 2023	1,549,939	$	328.70	1,546,953	$	14,748,903,852
August 28, 2023 – September 24, 2023	1,642,254	324.92		1,640,096	14,216,012,142
September 25, 2023 – October 29, 2023	1,579,519	292.96		1,570,423	13,756,031,773
	4,771,712	315.57		4,757,472

—————

(1)These amounts include repurchases pursuant to our Omnibus Stock Incentive Plan, as Amended and Restated May 19, 2022, and our 1997 Omnibus Stock Incentive Plan (collectively, the “Plans”). Under the Plans, participants surrender shares as payment of applicable tax withholding on the vesting of restricted stock. Participants in the Plans may also exercise stock options by surrendering shares of common stock that the participants already own as payment of the exercise price. Shares so surrendered by participants in the Plans are repurchased pursuant to the terms of the Plans and applicable award agreement and not pursuant to publicly announced share repurchase programs.

(2)On August 14, 2023, our Board of Directors approved a $15.0 billion share repurchase authorization that replaced the previous authorization of $15.0 billion, which was approved on August 18, 2022. This new authorization does not have a prescribed expiration date.

(3)Excludes excise taxes incurred on share repurchases.

SALES OF UNREGISTERED SECURITIES

During the third quarter of fiscal 2023, we issued 553 deferred stock units under The Home Depot, Inc. Nonemployee Directors’ Deferred Stock Compensation Plan pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506 of the SEC’s Regulation D thereunder. The deferred stock units were credited during the third quarter of fiscal 2023 to the accounts of those non-employee directors who elected to receive all or a portion of board retainers in the form of deferred stock units instead of cash. The deferred stock units convert to shares of common stock on a one-for-one basis following a termination of service as described in this plan.

During the third quarter of fiscal 2023, we credited 935 deferred stock units to participant accounts under the Restoration Plans pursuant to an exemption from the registration requirements of the Securities Act for involuntary, non-contributory plans. The deferred stock units convert to shares of common stock on a one-for-one basis following a termination of service as described in these plans.

Item 5. Other Information.

During the fiscal quarter ended October 29, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of the SEC’s Regulation S-K.

Fiscal Q3 2023 Form 10-Q 22

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Item 6. Exhibits.

Exhibits marked with an asterisk (*) are incorporated by reference to exhibits or appendices previously filed with the SEC, as indicated by the references in brackets. All other exhibits are filed or furnished herewith.

Exhibit		Description
3.1	*	Amended and Restated Certificate of Incorporation of The Home Depot, Inc. [Form 10-Q filed on September 1, 2011, Exhibit 3.1]
3.2	*	By-Laws of The Home Depot, Inc. (As Amended and Restated Effective February 23, 2023) [Form 8-K filed on February 28, 2023, Exhibit 3.2]
10.1	†	Employment Arrangement between Ann-Marie Campbell and The Home Depot, Inc. dated October 25, 2023
15.1		Acknowledgement of Independent Registered Public Accounting Firm
31.1		Certification of the Chair, President and Chief Executive Officer pursuant to Rule 13a-14(a)
31.2		Certification of the Executive Vice President and Chief Financial Officer pursuant to Rule 13a-14(a)
32.1		Certification of the Chair, President and Chief Executive Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of the Executive Vice President and Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

—————

†    Management contract or compensatory plan or arrangement

Fiscal Q3 2023 Form 10-Q 23

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

THE HOME DEPOT, INC. (Registrant)
By:	/s/ EDWARD P. DECKER
	Edward P. Decker, Chair, President and Chief Executive Officer (Principal Executive Officer)
	/s/ RICHARD V. MCPHAIL
	Richard V. McPhail, Executive Vice President and Chief Financial Officer (Principal Financial Officer)
	/s/ KIMBERLY R. SCARDINO
	Kimberly R. Scardino, Senior Vice President – Finance, Chief Accounting Officer and Controller (Principal Accounting Officer)
Date:	November 20, 2023

Fiscal Q3 2023 Form 10-Q 24

EX-10.1

Exhibit 10.1

[Home Depot Letterhead]

October 25, 2023

Ann-Marie Campbell

Dear Ann-Marie:

I am pleased to confirm The Home Depot, Inc.’s (the “Company” or “Home Depot”) offer to you of the position of Senior Executive Vice President, on the terms and conditions described herein. Please sign below to indicate your acceptance of this offer.

1.Your Position, Reporting, Effective Date

You are being offered the position of Senior Executive Vice President, reporting directly to me, with an effective date of November 1, 2023.

2.Your Compensation and Benefits

a.Base Salary

Your annual base salary will be $1,000,000 payable in equal bi-weekly installments. Your next salary review will be held in April of 2024, with salary reviews held annually thereafter.

b.Management Incentive Plan for Officers

In addition to your base salary, you will be eligible to participate in the Management Incentive Plan (“MIP”) for officers which provides an annual incentive target of up to 125% of your base salary. MIP will be paid annually based on achievement of the established goals. The earned incentive, if any, will be prorated based on the number of full months since the effective date of your new position. To be eligible for payment of any incentive, you must be employed on the day on which the incentive is paid.

c.Equity Grants

Home Depot has typically awarded an annual equity grant to officers in March of each year under The Home Depot, Inc. Omnibus Stock Incentive Plan, As Amended and Restated May 19, 2022 (the “Omnibus Plan”). Currently, equity awards for officers in March 2024 are expected to consist of restricted stock, stock options, and performance shares. Vesting and performance goals for these awards are established annually for each grant. In March 2024, you will be eligible to receive the same types of equity awards as other officers in the Company. Annual equity awards are not guaranteed as compensation, and there is no minimum or guaranteed award.

At the next regularly scheduled quarterly meeting of the Leadership Development and Compensation Committee of The Home Depot, Inc. Board of Directors following the effective date of your new position, you will receive a grant under the Omnibus Plan of the greatest number of whole shares of restricted common stock of The Home Depot, Inc. (“Common Stock”) resulting from dividing $125,000 by the closing stock price on the grant date, vesting 50% after 30 months and 50% after 60 months. Once these provisions lapse, the shares will be yours, free and clear of restrictions, subject to the applicable

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provisions of the Omnibus Plan and award document. You will also receive a grant of nonqualified stock options under the Omnibus Plan equal to the greatest number of whole shares of Common Stock resulting from dividing $125,000 by the grant date accounting cost of the stock options, with an exercise price equal to the closing stock price on the grant date. Twenty-five percent of the stock options will become exercisable on the second, third, fourth, and fifth anniversaries of the grant date. Expiration of all stock options will be the earlier of ten years from the grant date, employment termination, or any earlier time provided by the Omnibus Plan or your award document. As a condition to receiving any equity grant, you agree to comply with The Home Depot, Inc.’s Securities Laws Policy.

d.The Home Depot Inc. Employee Stock Purchase Plan Eligibility

You will remain eligible to participate in The Home Depot, Inc.’s Employee Stock Purchase Plan. The plan affords you the opportunity to purchase The Home Depot, Inc. common stock, subject to a cap, at a 15% discount through payroll deductions.

e.The Home Depot Deferred Compensation Plan for Officers

You will remain eligible to participate in The Home Depot Deferred Compensation Plan for Officers. This plan affords you the opportunity to defer up to 50% of your base salary and 100% of your MIP payment into the plan.

f.Other Benefit Programs

You will remain eligible for employee benefits and other programs on the same terms and conditions available to other senior officers of the Company.

g.Other Terms

The terms of your annual base salary, the MIP and other benefits set forth herein are subject to future modification or termination at the Company’s discretion. All compensation and benefits are subject to any required tax withholding.

3.Your General Obligations to Home Depot While You are Employed with the Company

a.Exclusive Employment with Home Depot

You agree that you will devote your full business time and attention to your job with Home Depot and that your job with Home Depot will be your sole occupation during the time you are employed with the Company. Except for passive personal investments or charitable work for nonprofit organizations, as of the date you begin employment with Home Depot, you will not perform any work for any person or entity for which you receive any form of compensation, including cash, equity, or in-kind payments, without the express written consent of the Executive Vice President, Human Resources of The Home Depot, Inc. (hereinafter “EVP, HR”). You also agree that without the prior express written consent of both the Company’s General Counsel and CEO you will not pursue, accept, or retain a position on (i) the board of directors of a company that is publicly traded or intends to become publicly traded or (ii) an advisory board or a private company board of directors for which you receive any form of compensation.

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b.Restrictions on Outside Activities or Investments

You agree that you shall not, without the prior express written consent of the EVP, HR, engage in or have any financial or other interests in, or render any service in any capacity to any competitor or supplier of the Company, its subsidiaries, affiliates, or related entities during the course of your employment with the Company. Hereinafter, the Company and its subsidiaries, affiliates and related entities are referred to collectively as the “Company-Related Parties.” Notwithstanding the foregoing, you shall not be restricted from owning securities of corporations listed on a national securities exchange or regularly traded by national securities dealers, provided that such ownership was acquired in a manner not prohibited by the Company’s Conflict of Interest policy. The provisions of this paragraph shall apply to you, your immediate family members, and any person living in your household.

c.Compliance with Policies of Home Depot

You recognize that, as a Company leader, your compliance with both the letter and spirit of Company policies, rules, and procedures is critical to reinforcing the Company’s culture of compliance. Accordingly, you agree that you will fully comply with all applicable Company rules, policies, and procedures, including The Home Depot Business Code of Conduct and Ethics, Corporate Compliance Policies, and Standard Operating Procedures, and you will take all appropriate measures to ensure others comply as well.

4.Your Obligations to Home Depot Regarding the Handling of Confidential Information, Trade Secrets, and Work Product

a.Protection of Trade Secrets and Confidential Information of Home Depot

You acknowledge that through your employment with the Company, you will acquire and have access to Confidential Information of the Company-Related Parties. You agree to use any Confidential Information of the Company-Related Parties that you acquire or have access to only for the purpose of conducting and completing your duties for the Company. You agree not to use any Confidential Information of the Company-Related Parties in any other manner or for any other purpose. You agree that you will not disclose any Confidential Information to any third party, other than as required for the purpose of conducting or completing your duties for the Company, subject to obtaining the appropriate approvals and implementing appropriate safeguards, and you further agree to return all documents or any other item or source containing Confidential Information or any other property of the Company-Related Parties to the Company immediately upon termination for any reason of your employment with the Company. This obligation shall remain in effect, both during and after your employment, for as long as the information or materials you have acquired or to which you have access retain their status as Confidential Information. This letter is not intended to, and does not, alter either the Company-Related Parties’ rights or your obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. You agree that the Company may prevent the use or disclosure of any Confidential Information of the Company-Related Parties through use of an injunction or other means and acknowledge that the Company-Related Parties have taken reasonable steps necessary to protect the secrecy of the Confidential Information.

For purposes of this letter, “Confidential Information” means any data or information that belongs and is valuable to the Company-Related Parties and not generally known to competitors of the Company-Related Parties or other outsiders, regardless of whether the Confidential Information is in printed, written

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or electronic form, retained in your memory or has been compiled or created by you, including but not limited to information related to: operations, services, information technology, computer systems, marketing, advertising, e-commerce, interconnected retail, technical, financial, human resources, personnel, staffing, payroll, information about employee compensation and performance, merchandising, pricing, strategic planning, product, vendor, supplier, customer or store planning data, construction, data security information, private brands, supply chain, and/or other business processes, or other information similar to the foregoing.

Pursuant to 18 U.S.C. § 1833(b), nothing in this letter, nor any other agreement or Company policy, shall be interpreted to expose you to criminal or civil liability under federal or state trade secret law for disclosure, in confidence, of trade secrets (i) to federal, state, and local government officials, directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, provided the filing is made under seal and otherwise protected from disclosure except pursuant to court order. If you file a lawsuit for retaliation for reporting a suspected violation of law, you may disclose trade secrets to your attorney and use the trade secret information in a court proceeding, provided that you file any document containing the trade secret under seal and you do not otherwise disclose the trade secret, except pursuant to court order. Nothing herein is intended to prohibit you from reporting possible violations of law or regulation to any governmental agency or entity having responsibility to investigate same or from making any truthful statement in connection with any legal proceeding or investigation by any governmental agency or entity.

b.Ownership of “Work Product”

You acknowledge and agree that any work product, including without limitation concepts, designs, notes, reports, documentation, drawings, computer programs (source code, object code, and listings), ideas, inventions (whether or not patentable), trade secrets, improvements, creations, scientific and mathematical models, writings, works, works of authorship (whether or not copyrightable), theses, books, lectures, illustrations, devices, masks, models, work-in-process, photographs, pictorial, graphical or audiovisual works or sound recordings or video recordings, prints, and deliverables, and any other subject matter which is or may become legally protectable or recognized as a form of property, and all materials contained therein and prepared in connection therewith and/or therefrom, whether in draft or final form (collectively, “Work Product”), which are designed, created, conceived, developed or reduced to practice, writing or publication by you, either solely or jointly with others, during your employment with Home Depot, which relate to or are useful in the Company-Related Parties’ business, or which derive in any way from using the Company-Related Parties’ property, shall be considered works made for hire and shall be owned by, and deemed the exclusive property of, Home Depot. Without in any way limiting the foregoing, and without any further compensation, in the event that it is determined that any Work Product does not qualify as a work made for hire or that it is not otherwise owned by Home Depot, you agree to assign and do hereby assign to Home Depot your right, title, and interest in and to any Work Product, whether now existing or created in the future, that arises from your employment with Home Depot, or that derives in any way from using the Company-Related Parties’ property. You further agree to execute any additional documents that Home Depot deems, in its sole discretion, necessary to vest ownership of Work Product with Home Depot or perfect such intellectual property rights in the United States and any other jurisdiction worldwide.

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c.Protection of Information that Belongs to Others

You understand that it is not the intention of Home Depot to receive or obtain any trade secrets, proprietary information, or other confidential information of others. Accordingly, you agree that you will not disclose or use during or in connection with your employment with Home Depot any trade secrets, proprietary information, or confidential information to which you may have been exposed or that you may have acquired in connection with your prior employment or engagement as an independent contractor or consultant. Further, you agree that you will not bring to Home Depot any documents or materials in any form containing trade secrets, proprietary information, or confidential information from a prior employer, client, or customer.

5.Post-Employment Restrictive Covenants

a.Non-Competition

By accepting this offer, you acknowledge and agree that, as a key executive of the Company, you have and will receive training and Confidential Information regarding, among other things, the Company-Related Parties’ operations, services, information technology, computer systems, marketing, advertising, e-commerce, interconnected retail, technical, financial, human resources, personnel, staffing, payroll, information about employee compensation and performance, merchandising, pricing, strategic planning, product, vendor, supplier, customer or store planning data, construction, data security information, private brands, supply chain, and/or other business processes, and that you have been and will be provided and entrusted with access to the Company-Related Parties’ customer and employee relationships and goodwill. You further acknowledge that such Confidential Information, including trade secrets and other business processes, are utilized by the Company-Related Parties throughout the entire United States and in other locations in which it conducts business. You further acknowledge and agree that the Company-Related Parties’ Confidential Information, customer, service provider, vendor and employee relationships, and goodwill are valuable assets of the Company-Related Parties and are legitimate business interests that are properly subject to protection through the covenants contained in this letter. Consequently, you agree that during the Restricted Period you shall not, directly or indirectly, enter into or maintain an employment, contractual or other business relationship, in the United States, Canada, or Mexico, in which (A) you own an equity interest in a Competitor greater than one percent (1%) of its outstanding equity, or manage, operate, finance, or control a Competitor; or (B) you provide services or perform duties for a Competitor that (i) are the same as or similar to the services or job duties you performed for the Company at any point during the two-year period prior to the termination of your employment, or (ii) involve executive, managerial, financial, or other significant leadership responsibilities.

“Competitor” shall mean:

(X) the following companies or entities, including their successors, subsidiaries, affiliates, franchisees, or business units: Lowe’s Companies, Inc.; Amazon.com, Inc.; Menard, Inc.; Floor & Decor Holdings, Inc.; Canadian Tire Corporation; RONA; Wayfair Inc.; and Walmart Inc.;

(Y) any company or entity that sells or offers Competitive Products or Services that, in combination with its subsidiaries, affiliates, franchisees, or business units (a) operates more than 100 retail outlets across the United States, Canada, and Mexico or (b) generates more than $500 million in annual revenue; or

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(Z) any company or entity that is formed through, or as a result of, a sale, merger, combination, renaming, restructuring, spin-off, or other corporate transaction involving a business or entity defined in clause (X) or (Y) of this definition, and which sells Competitive Products or Services.

“Competitive Products or Services” means anything of commercial value of the type offered, provided or sold by the Company-Related Parties in the United States, Canada, or Mexico within two (2) years prior to termination of your employment and during the Restricted Period, including, without limitation: goods; personal, real, or intangible property; services; financial products; business opportunities or assistance; or any other object or aspect of business conducted or provided by Company-Related Parties.

“Restricted Period” shall mean the period during which you are employed with the Company and for a period of twenty-four (24) months following the termination of your employment, regardless of the reason for such termination.

b.Non-Solicitation of Company Employees

You agree that during the course of your employment and for a period of thirty-six (36) months following the termination of your employment with the Company (“Non-Solicitation Period”), you will not directly or indirectly, on your own behalf or on behalf of any other entity or person, Solicit any person who is, or during the last twelve (12) months of your employment with the Company was, an employee of any of the Company-Related Parties, with whom you had material contact during your employment, or with respect to whom you obtained or had authorized access to Confidential Information while employed with the Company, to terminate his or her employment or other relationship with any of the Company-Related Parties, or to refer any such employee to anyone, without the prior written approval from the EVP, HR. For purposes of this paragraph, “Solicit” shall include any solicitation, enticement, or encouragement whatsoever, regardless of which party initiated the initial contact, as well as any direct or indirect involvement in the recruitment, referral, interviewing, hiring, or setting of the initial terms and conditions of employment.

c.Remedies for Breach

i.Injunctive Relief

You acknowledge and agree that quantifying the damages suffered by the Company for your breach of Section 4(a), 4(b), 5(a) or 5(b) might not be possible or feasible, or provide adequate compensation to the Company at law and that the balance of the hardships tips in favor of enforcing such section(s). You agree that the Company shall be entitled, if any such breach shall occur or be either threatened or attempted, if it so elects, to seek from a court a temporary, preliminary, and permanent injunction, without being required to post a bond, enjoining and restraining such breach or threatened or attempted breach.

ii.Liquidated Damages

Because of the potential difficulty in quantifying damages that the Company may suffer in the event of a breach by you of Section 4(a), 4(b), 5(a) or 5(b), you and the Company agree that it is appropriate to reasonably estimate such damages in advance and set an amount of liquidated damages that you will owe the Company in the event of a breach. Accordingly, after due consideration, you and the Company agree that, if you breach Section 4(a), 4(b), 5(a) or 5(b), you shall pay the Company, upon demand, an amount specified by the Company, up to the sum of the then-current market value of the shares of Common Stock

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that you hold that were granted by any equity awards and the aggregate after-tax proceeds you received upon the sale or other disposition of any shares of Common Stock granted by any equity award(s).

iii.Other Remedies

In addition to any and all other remedies at law or equity, including monetary damages, the Company shall be entitled to recover its reasonable attorney fees if it succeeds in obtaining an injunction against you for breach or threatened breach of Section 4(a), 4(b), 5(a) or 5(b), or otherwise proving in court that you violated any provision of Section 4(a), 4(b), 5(a) or 5(b).

You acknowledge that the purpose and effect of Section 5(a) or 5(b) would be frustrated by measuring the duration of the Restricted Period or the Non-Solicitation Period from the termination of your employment if you were to fail to honor your obligation(s) until directed to do so by court order. Should legal proceedings be initiated by the Company to enforce Section 5(a) or Section 5(b), the commencement of the Restricted Period or the Non-Solicitation Period shall be tolled and extended and will instead begin on the date of the entry of an order granting the Company injunctive, monetary or other relief from your actual or threatened breach of this Agreement.

You further agree to waive and not assert any claim for advancement of legal fees, costs, or expenses pursuant to the Company’s by-laws or based on other authority in the event the Company initiates a legal action against you for violation of Section 4(a), 4(b), 5(a) or 5(b).

d.Reasonableness of Restrictions

You acknowledge and agree that each of the covenants in this letter is reasonable, appropriate, and narrowly tailored to protect the Company’s legitimate interests, including but not limited to protecting Company-Related Parties’ Confidential Information, and that your full compliance with such restrictions will not unduly or unreasonably interfere with your ability to obtain and undertake other gainful future employment. You and the Company acknowledge and agree that there are number of unique circumstances that provide the Company with protectable interests that justify and necessitate the 24-month Restricted Period in Section 5(a) and the 36-month Non-Solicitation Period in Section 5(b). As one of the Company’s senior-most officers, you will be involved in developing, and have unique access to, the Company-Related Parties’ Confidential Information, including its plans and strategies for the business, personnel leadership, talent management, and succession. This involvement and access enables you to learn information about the skills, capabilities, strengths, and weaknesses of Company-Related Parties’ personnel, as well as information about their compensation, bonuses, and performance, and Company-Related Parties’ plans and strategies for same. In addition, your position at the Company provides you with a unique and special access to the Company-Related Parties’ non-public business plans, strategies, and methods. Furthermore, your role with the Company enables you to utilize the Company-Related Parties’ goodwill to develop relationships with subordinate employees throughout the Company-Related Parties.

Accordingly, you agree that these and other facts and circumstances associated with your position justify the scope and duration of the restrictions in Sections 5(a) and 5(b).

October 25, 2023

Page 8

With respect to Section 5(a), in the event you wish to enter into any relationship or employment on or before the end of the Restricted Period that would potentially violate the restrictions in Section 5(a), you agree to request written permission from the EVP, HR before entering any such relationship or employment. The Company may approve or not approve of the relationship or employment at its absolute discretion.

You and the Company agree that the amounts set forth in Section 5(c)(ii) for a breach of Section 4(a), 4(b), 5(a) or 5(b) shall represent a fair and reasonable measure of the Company's estimated damages for your breach, shall be deemed to have been fully negotiated and established bilaterally by you and the Company through such negotiations, and shall not constitute a penalty.

e.Reformation, Severability, and “Blue-Penciling”

If any of the provisions of Section 4(a), 4(b), 5(a) or 5(b) should ever be held by a court of competent jurisdiction to exceed the scope permitted by applicable law, you agree such provision or provisions shall first be modified to such lesser scope as the court may deem just and proper for the reasonable protection of the Company’s legitimate business interests. In the alternative, if modification is not available, you and the Company agree that the court may sever such provision from this Offer Letter and enforce the remaining provisions. If the amounts set forth in Section 5(c)(ii) should be deemed for any reason by a court of competent jurisdiction not to constitute a permissible liquidated damage, you and the Company agree that the court may establish a liquidated damage in such lesser amount that is in accordance with applicable law.

6.At-Will Employment

This letter should not be construed, nor is it intended, to be a contract of employment for a specified period of time or in any way limiting the Company’s right to terminate the employment relationship. Your employment relationship is “at will.” The Company reserves the right to terminate your employment with or without cause at any time.

7.Interpretation and Enforcement of this Offer Letter and the Terms Contained Herein

This letter supersedes any prior employment agreement, offer letters, or understandings, written or oral between you and the Company-Related Parties and contains the entire understanding of the Company and you with respect to the subject matter hereof, except that this letter does not supersede or limit any post-employment restrictions or obligations to the Company-Related Parties that may be contained in any agreement, plan, or document arising out of or relating to equity awards, incentive or bonus awards, or similar arrangements.

The terms of this letter shall be binding on, and in favor of, the Company’s successors in interest and assigns.

This letter shall be construed, interpreted and applied in accordance with the law of the State of Georgia, without giving effect to any choice of law provisions thereof that would require the application of any other jurisdiction’s laws. You agree to irrevocably submit any dispute arising out of or relating to this letter to the exclusive jurisdiction of the Atlanta Division of the U.S. District Court for the Northern District of Georgia, or if federal jurisdiction is not available, the Superior Court of Cobb County, Georgia. You also irrevocably waive, to the fullest extent permitted by applicable law, any objection you may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of

October 25, 2023

Page 9

inconvenient forum for the maintenance of such dispute, and you agree to personal jurisdiction and to accept service of legal process from the courts of Georgia. Subject to the parties’ agreement set forth above regarding modification, in the event any provision in this letter is determined to be legally invalid or unenforceable by any court of competent jurisdiction, and cannot be modified to be enforceable, the affected provision shall be stricken from the letter, and the remaining terms of the letter and its enforceability shall remain unaffected. You agree to accept service of process by mail or by any other means sufficient to ensure that you receive a copy of the items served.

Ann-Marie, we are pleased to extend this offer to you, and we are excited about the opportunities that your leadership will bring to this new role. We have enclosed a copy of this letter for your records. Please sign, date and return the original to us.

Sincerely,

/s/ Ted Decker

Ted Decker

Chair, President and Chief Executive Officer

I accept this offer as Senior Executive Vice President, pursuant to the foregoing terms and conditions:

/s/ Ann-Marie Campbell        10/30/2023    

Ann-Marie Campbell                        Date Signed

EX-15.1

Exhibit 15.1

ACKNOWLEDGEMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

The Home Depot, Inc.:

We acknowledge our awareness of the use of our report dated November 20, 2023 related to our review of interim financial information included within the Quarterly Report on Form 10-Q of The Home Depot, Inc. for the three-month and nine-month periods ended October 29, 2023, and incorporated by reference in the following Registration Statements:

Description	Registration Statement Number
Form S-3:
Depot Direct stock purchase program	333-274395
Debt securities	333-259121
Form S-8:
The Home Depot, Inc. 1997 Omnibus Stock Incentive Plan	333-61733
The Home Depot Canada Registered Retirement Savings Plan	333-38946
The Home Depot, Inc. Restated and Amended Employee Stock Purchase Plan	333-151849
The Home Depot, Inc. Amended and Restated Employee Stock Purchase Plan	333-182374
The Home Depot, Inc. Non-Qualified Stock Option and Deferred Stock Units Plan and Agreement	333-56722
The Home Depot, Inc. 2005 Omnibus Stock Incentive Plan	333-125331
The Home Depot, Inc. 2005 Omnibus Stock Incentive Plan	333-153171
The Home Depot FutureBuilder and The Home Depot FutureBuilder for Puerto Rico	333-125332

Pursuant to Rule 436 under the Securities Act of 1933 (“the Act”), such report is not considered part of a registration statement prepared or certified by an independent registered public accounting firm, or a report prepared or certified by an independent registered public accounting firm within the meaning of Sections 7 and 11 of the Act.

/s/ KPMG LLP

Atlanta, Georgia

November 20, 2023

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Edward P. Decker, certify that:

1.I have reviewed this quarterly report on Form 10-Q of The Home Depot, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 20, 2023

/s/ Edward P. Decker    

Edward P. Decker

Chair, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Richard V. McPhail, certify that:

1.I have reviewed this quarterly report on Form 10-Q of The Home Depot, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 20, 2023

/s/ Richard V. McPhail     

Richard V. McPhail

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of The Home Depot, Inc. (the “Company”) on Form 10-Q (“Form 10-Q”) for the period ended October 29, 2023 as filed with the Securities and Exchange Commission, I, Edward P. Decker, Chair, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Edward P. Decker

Edward P. Decker

Chair, President and Chief Executive Officer

November 20, 2023

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of The Home Depot, Inc. (the “Company”) on Form 10-Q (“Form 10-Q”) for the period ended October 29, 2023 as filed with the Securities and Exchange Commission, I, Richard V. McPhail, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Richard V. McPhail     

Richard V. McPhail

Executive Vice President and Chief Financial Officer

November 20, 2023

XML

Cover - shares	9 Months Ended
	Oct. 29, 2023	Nov. 14, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Oct. 29, 2023
Document Transition Report	false
Entity File Number	1-8207
Entity Registrant Name	HOME DEPOT, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	95-3261426
Entity Address, Address Line One	2455 Paces Ferry Road
Entity Address, City or Town	Atlanta,
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30339
City Area Code	770
Local Phone Number	433-8211
Title of 12(b) Security	Common Stock, $0.05 Par Value Per Share
Trading Symbol	HD
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		995,261,844
Entity Central Index Key	0000354950
Current Fiscal Year End Date	--01-28
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Oct. 29, 2023	Jan. 29, 2023
Current assets:
Cash and cash equivalents	$ 2,058	$ 2,757
Receivables, net	3,932	3,317
Merchandise inventories	22,805	24,886
Other current assets	1,887	1,511
Total current assets	30,682	32,471
Net property and equipment	25,735	25,631
Operating lease right-of-use assets	7,071	6,941
Goodwill	7,937	7,444
Other assets	4,152	3,958
Total assets	75,577	76,445
Current liabilities:
Accounts payable	11,478	11,443
Accrued salaries and related expenses	2,034	1,991
Sales taxes payable	590	528
Deferred revenue	2,784	3,064
Income taxes payable	304	50
Current installments of long-term debt	1,362	1,231
Current operating lease liabilities	1,026	945
Other accrued expenses	3,994	3,858
Total current liabilities	23,572	23,110
Long-term debt, excluding current installments	40,567	41,962
Long-term operating lease liabilities	6,300	6,226
Deferred income taxes	753	1,019
Other long-term liabilities	2,955	2,566
Total liabilities	74,147	74,883
Contingencies (Note 8)
Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,796 shares at October 29, 2023 and 1,794 shares at January 29, 2023; outstanding: 996 shares at October 29, 2023 and 1,016 shares at January 29, 2023	90	90
Paid-in capital	12,927	12,592
Retained earnings	82,934	76,896
Accumulated other comprehensive loss	(662)	(718)
Treasury stock, at cost, 800 shares at October 29, 2023 and 778 shares at January 29, 2023	(93,859)	(87,298)
Total stockholders’ equity	1,430	1,562
Total liabilities and stockholders’ equity	$ 75,577	$ 76,445

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions	Oct. 29, 2023	Jan. 29, 2023
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.05	$ 0.05
Common stock, authorized (in shares)	10,000	10,000
Common stock, issued (in shares)	1,796	1,794
Common stock, outstanding (in shares)	996	1,016
Treasury stock (in shares)	800	778

XML

Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Oct. 29, 2023	Oct. 30, 2022
Income Statement [Abstract]
Net sales	$ 37,710	$ 38,872	$ 117,883	$ 121,572
Cost of sales	24,972	25,648	78,431	80,720
Gross profit	12,738	13,224	39,452	40,852
Operating expenses:
Selling, general and administrative	6,649	6,468	19,919	19,735
Depreciation and amortization	683	608	1,987	1,830
Total operating expenses	7,332	7,076	21,906	21,565
Operating income	5,406	6,148	17,546	19,287
Interest and other (income) expense:
Interest income and other, net	(49)	(7)	(123)	(12)
Interest expense	487	413	1,430	1,166
Interest and other, net	438	406	1,307	1,154
Earnings before provision for income taxes	4,968	5,742	16,239	18,133
Provision for income taxes	1,158	1,403	3,897	4,390
Net earnings	$ 3,810	$ 4,339	$ 12,342	$ 13,743
Basic weighted average common shares (in shares)	996	1,020	1,002	1,024
Basic earnings per share (in dollars per share)	$ 3.83	$ 4.25	$ 12.32	$ 13.42
Diluted weighted average common shares (in shares)	999	1,023	1,005	1,028
Diluted earnings per share (in dollars per share)	$ 3.81	$ 4.24	$ 12.28	$ 13.37

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Oct. 29, 2023	Oct. 30, 2022
Statement of Comprehensive Income [Abstract]
Net earnings	$ 3,810	$ 4,339	$ 12,342	$ 13,743
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(196)	(187)	51	(158)
Cash flow hedges	1	3	5	6
Total other comprehensive income (loss), net of tax	(195)	(184)	56	(152)
Comprehensive income	$ 3,615	$ 4,155	$ 12,398	$ 13,591

XML

Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions	Total	Common Stock	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock
Balance at beginning of period at Jan. 30, 2022		$ 90	$ 12,132	$ 67,580	$ (704)	$ (80,794)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued under employee stock plans, net		0	(21)
Stock-based compensation expense			274
Net earnings	$ 13,743			13,743
Cash dividends				(5,856)
Foreign currency translation adjustments, net of tax	(158)				(158)
Cash flow hedges, net of tax	6				6
Repurchases of common stock	(4,994)					(4,994)
Balance at end of period at Oct. 30, 2022	1,298	90	12,385	75,467	(856)	(85,788)
Balance at beginning of period at Jul. 31, 2022		90	12,309	73,074	(672)	(84,564)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued under employee stock plans, net		0	(2)
Stock-based compensation expense			78
Net earnings	4,339			4,339
Cash dividends				(1,946)
Foreign currency translation adjustments, net of tax	(187)				(187)
Cash flow hedges, net of tax	3				3
Repurchases of common stock	(1,224)					(1,224)
Balance at end of period at Oct. 30, 2022	1,298	90	12,385	75,467	(856)	(85,788)
Balance at beginning of period at Jan. 29, 2023	1,562	90	12,592	76,896	(718)	(87,298)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued under employee stock plans, net		0	46
Stock-based compensation expense			289
Net earnings	12,342			12,342
Cash dividends				(6,304)
Foreign currency translation adjustments, net of tax	51				51
Cash flow hedges, net of tax	5				5
Repurchases of common stock	(6,561)					(6,561)
Balance at end of period at Oct. 29, 2023	1,430	90	12,927	82,934	(662)	(93,859)
Balance at beginning of period at Jul. 30, 2023		90	12,842	81,213	(467)	(92,343)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued under employee stock plans, net		0	11
Stock-based compensation expense			74
Net earnings	3,810			3,810
Cash dividends				(2,089)
Foreign currency translation adjustments, net of tax	(196)				(196)
Cash flow hedges, net of tax	1				1
Repurchases of common stock	(1,516)					(1,516)
Balance at end of period at Oct. 29, 2023	$ 1,430	$ 90	$ 12,927	$ 82,934	$ (662)	$ (93,859)

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Oct. 29, 2023	Oct. 30, 2022
Cash Flows from Operating Activities:
Net earnings	$ 12,342	$ 13,743
Reconciliation of net earnings to net cash provided by operating activities:
Depreciation and amortization	2,415	2,216
Stock-based compensation expense	300	286
Changes in receivables, net	(538)	(312)
Changes in merchandise inventories	2,131	(3,748)
Changes in other current assets	(365)	(568)
Changes in accounts payable and accrued expenses	187	(1,568)
Changes in deferred revenue	(276)	(413)
Changes in income taxes payable	252	30
Changes in deferred income taxes	(310)	129
Other operating activities	301	226
Net cash provided by operating activities	16,439	10,021
Cash Flows from Investing Activities:
Capital expenditures	(2,368)	(2,216)
Payments for businesses acquired, net	(795)	0
Other investing activities	15	(29)
Net cash used in investing activities	(3,148)	(2,245)
Cash Flows from Financing Activities:
Repayments of short-term debt, net	0	(1,035)
Proceeds from long-term debt, net of discounts	0	6,942
Repayments of long-term debt	(1,200)	(2,423)
Repurchases of common stock	(6,465)	(5,136)
Proceeds from sales of common stock	192	146
Cash dividends	(6,304)	(5,856)
Other financing activities	(146)	(185)
Net cash used in financing activities	(13,923)	(7,547)
Change in cash and cash equivalents	(632)	229
Effect of exchange rate changes on cash and cash equivalents	(67)	(110)
Cash and cash equivalents at beginning of period	2,757	2,343
Cash and cash equivalents at end of period	2,058	2,462
Supplemental Disclosures:
Cash paid for interest, net of interest capitalized	1,504	1,160
Cash paid for income taxes	$ 3,817	$ 4,173

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Oct. 29, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

The Home Depot, Inc., together with its subsidiaries (the “Company,” “Home Depot,” “we,” “our” or “us”), is a home improvement retailer that sells a wide assortment of building materials, home improvement products, lawn and garden products, décor items, and facilities maintenance, repair and operations products, in stores and online. We also provide a number of services, including home improvement installation services and tool equipment rental. We operate in the U.S. (including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam), Canada, and Mexico, each representing one of our three operating segments, which we aggregate into one reportable segment due to the similar nature of their operations and economic characteristics.

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2022 Form 10-K.

There were no significant changes to our significant accounting policies as disclosed in the 2022 Form 10-K.

Recently Adopted Accounting Pronouncements

ASU No. 2022-04. In September 2022, the FASB issued ASU No. 2022-04, “Liabilities—Supplier Finance Programs (Topic 405-50): Disclosure of Supplier Finance Program Obligations,” to enhance the transparency of supplier finance programs used by an entity in connection with the purchase of goods and services. The standard requires entities that use supplier finance programs to disclose the key terms, including a description of payment terms, the confirmed amount outstanding under the program at the end of each reporting period, a description of where those obligations are presented on the balance sheet, and an annual rollforward, including the amount of obligations confirmed and the amount paid during the period. The guidance does not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs. ASU No. 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the required rollforward information, which is effective for fiscal years beginning after December 15, 2023. On January 30, 2023, we adopted ASU No. 2022-04 with no impact to our consolidated financial condition, results of operations, or cash flows.

We have a supplier finance program whereby we have entered into payment processing agreements with several financial institutions. Under these agreements, the financial institutions act as our paying agents with respect to accounts payable due to certain suppliers. Participating suppliers may, at their sole discretion, elect to receive payment for one or more of our payment obligations, prior to their scheduled due dates, at a discounted price from participating financial institutions. We are not a party to the agreements between the participating financial institutions and the suppliers in connection with the program, and our rights and obligations to our suppliers are not impacted. We do not reimburse suppliers for any costs they incur for participation in the program. We have not pledged any assets as security or provided any guarantees as part of the program. We have no economic interest in our suppliers’ decisions to participate in the program. Our responsibility is limited to making payment to the respective financial institution according to the terms originally negotiated with the supplier, regardless of whether the supplier elects to receive early payment from the financial institution.

The payment terms we negotiate with our suppliers are consistent, irrespective of whether a supplier participates in the program. Our current payment terms with a majority of our suppliers generally range from 30 to 60 days, which we deem to be commercially reasonable. Our outstanding payment obligations under our supplier finance program were $309 million at October 29, 2023 and $480 million at January 29, 2023, and are recorded within accounts payable on the consolidated balance sheets. The associated payments are included in operating activities within the consolidated statements of cash flows.

ASU No. 2020-04. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate discontinued as a result of reference rate reform. ASU No. 2020-04 is effective as of March 12, 2020 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. This guidance was subsequently amended by ASU No. 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848,” which was effective upon issuance in December 2022 and extended the temporary relief provided by Topic 848 through December 31, 2024.

During the second quarter of fiscal 2023, we amended our existing fixed-to-variable interest rate swap agreements, which were designated as fair value hedges, to transition the variable component of such agreements from LIBOR to the Secured Overnight Financing Rate (“SOFR”). Concurrent with these amendments, we elected certain of the optional expedients provided in Topic 848, which allow us to maintain our designation of fair value hedge accounting and application of the shortcut method for these agreements. The adoption of this guidance did not have a material impact on our consolidated financial condition, results of operations, or cash flows.

Recently Issued Accounting Pronouncements

Recent accounting pronouncements pending adoption are either not applicable or are not expected to have a material impact on our consolidated financial condition, results of operations, or cash flows.

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NET SALES

9 Months Ended

Oct. 29, 2023

Revenue from Contract with Customer [Abstract]

Net Sales

NET SALES

The following table presents net sales, classified by geography:

	Three Months Ended				Nine Months Ended
in millions	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Net sales – in the U.S.	$	34,544	$	35,784	$	108,242	$	111,834
Net sales – outside the U.S.	3,166		3,088		9,641		9,738
Net sales	$	37,710	$	38,872	$	117,883	$	121,572

The following table presents net sales by products and services:

	Three Months Ended				Nine Months Ended
in millions	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Net sales – products	$	36,156	$	37,448	$	113,405	$	117,261
Net sales – services	1,554		1,424		4,478		4,311
Net sales	$	37,710	$	38,872	$	117,883	$	121,572

The following table presents major product lines and the related merchandising departments (and related services):

Major Product Line	Merchandising Departments
Building Materials	Building Materials, Electrical/Lighting, Lumber, Millwork, and Plumbing
Décor	Appliances, Décor/Storage, Flooring, Kitchen and Bath, and Paint
Hardlines	Hardware, Indoor Garden, Outdoor Garden, and Tools

The following table presents net sales by major product line (and related services):

	Three Months Ended				Nine Months Ended
in millions	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Building Materials	$	14,744	$	15,343	$	44,214	$	46,095
Décor	12,653		13,070		38,315		40,040
Hardlines	10,313		10,459		35,354		35,437
Net sales	$	37,710	$	38,872	$	117,883	$	121,572

Deferred Revenue

For products and services sold in stores or online, payment is typically due at the point of sale. When we receive payment from customers before the customer has taken possession of the merchandise or the service has been performed, the amount received is recorded as deferred revenue until the sale or service is complete. Such performance obligations are part of contracts with expected original durations of typically three months or less. As of October 29, 2023 and January 29, 2023, deferred revenue for products and services was $1.8 billion and $2.0 billion, respectively.

We further record deferred revenue for the sale of gift cards and recognize the associated revenue upon the redemption of those gift cards, which generally occurs within six months of gift card issuance. As of October 29, 2023 and January 29, 2023, our performance obligations for unredeemed gift cards were $1.0 billion and $1.1 billion, respectively. Gift card breakage income, which is our estimate of the portion of our outstanding gift card balance not expected to be redeemed, was immaterial during the three and nine months ended October 29, 2023 and October 30, 2022.

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PROPERTY AND LEASES

9 Months Ended

Oct. 29, 2023

Leases [Abstract]

Property and Leases

PROPERTY AND LEASES

Net Property and Equipment

Net property and equipment included accumulated depreciation and finance lease amortization of $28.1 billion as of October 29, 2023 and $26.6 billion as of January 29, 2023.

Leases

The following table presents the consolidated balance sheet classification related to operating and finance leases:

in millions	Consolidated Balance Sheet Classification	October 29, 2023		January 29, 2023
Assets:
Operating lease assets	Operating lease right-of-use assets	$	7,071	$	6,941
Finance lease assets (1)	Net property and equipment	2,860		2,899
Total lease assets		$	9,931	$	9,840
Liabilities:
Current:
Operating lease liabilities	Current operating lease liabilities	$	1,026	$	945
Finance lease liabilities	Current installments of long-term debt	262		231
Long-term:
Operating lease liabilities	Long-term operating lease liabilities	6,300		6,226
Finance lease liabilities	Long-term debt, excluding current installments	3,032		3,054
Total lease liabilities		$	10,620	$	10,456

—————

(1) Finance lease assets are recorded net of accumulated amortization of $1.2 billion as of both October 29, 2023 and January 29, 2023.

The following table presents supplemental non-cash information related to leases:

	Nine Months Ended
in millions	October 29, 2023		October 30, 2022
Lease assets obtained in exchange for new operating lease liabilities	$	791	$	1,308
Lease assets obtained in exchange for new finance lease liabilities	261		234

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DEBT AND DERIVATIVE INSTRUMENTS

9 Months Ended

Oct. 29, 2023

Debt Disclosure [Abstract]

Debt and Derivative Instruments

DEBT AND DERIVATIVE INSTRUMENTS

Short-Term Debt

We have a commercial paper program that allows for borrowings up to $5.0 billion. In connection with our program, we have back-up credit facilities with a consortium of banks for borrowings up to $5.0 billion, which consist of a five-year $3.5 billion credit facility scheduled to expire in July 2027 and a 364-day $1.5 billion credit facility scheduled to expire in July 2024. In July 2023, we completed the renewal of our 364-day $1.5 billion credit facility, extending the maturity from July 2023 to July 2024. All of our short-term borrowings in the first nine months of fiscal 2023 were under our commercial paper program, and the maximum amount outstanding at any time was $1.5 billion. At both October 29, 2023 and January 29, 2023, there were no outstanding borrowings under our commercial paper program.

Long-Term Debt

We did not have any new issuances of senior notes during the first nine months of fiscal 2023. In April 2023, we repaid our $1.0 billion 2.70% senior notes at maturity.

Derivative Instruments and Hedging Activities

We had outstanding interest rate swap agreements with combined notional amounts of $5.4 billion at both October 29, 2023 and January 29, 2023. These agreements are accounted for as fair value hedges that swap fixed for variable rate interest to hedge changes in the fair values of certain senior notes. At October 29, 2023 and January 29, 2023, the fair values of these agreements totaled $1.1 billion and $778 million, respectively, all of which are recognized within other long-term liabilities on the consolidated balance sheets.

All of our interest rate swap agreements are designated as fair value hedges and meet the shortcut method requirements under GAAP. Accordingly, the changes in the fair values of these agreements offset the changes in the fair value of the hedged long-term debt.

During the second quarter of fiscal 2023, we amended all of our interest rate swap agreements to replace LIBOR with SOFR and concurrently adopted certain expedients provided in Topic 848. These amendments did not result in any change to our application of hedge accounting or have a material impact to our consolidated financial statements. See Note 1 for further discussion.

There were no material changes to any other hedging arrangements disclosed in our 2022 Form 10-K, and all related activity was immaterial for the periods presented within this document.

Collateral. We generally enter into master netting arrangements, which are designed to reduce credit risk by permitting net settlement of transactions with the same counterparty. To further limit our credit risk, we enter into collateral security arrangements that provide for collateral to be received or posted when the net fair value of certain derivative instruments exceeds or falls below contractually established thresholds. The cash collateral posted by the Company related to derivative instruments under our collateral security arrangements was $926 million and $634 million as of October 29, 2023 and January 29, 2023, respectively, which was recorded in other current assets on the consolidated balance sheets. We did not hold any cash collateral as of October 29, 2023 or January 29, 2023.

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STOCKHOLDERS' EQUITY

9 Months Ended

Oct. 29, 2023

Equity [Abstract]

Stockholders' Equity

STOCKHOLDERS' EQUITY

Stock Rollforward

The following table presents a reconciliation of the number of shares of our common stock outstanding and cash dividends per share:

shares in millions	Three Months Ended				Nine Months Ended
	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Common stock:
Shares at beginning of period	1,796		1,793		1,794		1,792
Shares issued under employee stock plans, net	—		—		2		1
Shares at end of period	1,796		1,793		1,796		1,793
Treasury stock:
Shares at beginning of period	(795)		(769)		(778)		(757)
Repurchases of common stock	(5)		(4)		(22)		(16)
Shares at end of period	(800)		(773)		(800)		(773)
Shares outstanding at end of period	996		1,020		996		1,020
Cash dividends per share	$	2.09	$	1.90	$	6.27	$	5.70

Share Repurchases

In August 2023, our Board of Directors approved a $15.0 billion share repurchase authorization that replaced the previous authorization of $15.0 billion, which was approved in August 2022. This new authorization does not have a prescribed expiration date. As of October 29, 2023, approximately $13.8 billion of the $15.0 billion share repurchase authorization remained available.

The following table presents information about our repurchases of common stock, all of which were completed through open market purchases:

in millions	Three Months Ended				Nine Months Ended
	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Total number of shares repurchased	5		4		22		16
Total cost of shares repurchased (1)	$	1,516	$	1,224	$	6,561	$	4,994

—————

(1) Effective January 1, 2023, the Company’s share repurchases are subject to a 1% excise tax as a result of the Inflation Reduction Act of 2022. Excise taxes incurred on share repurchases represent direct costs of the repurchase and are recorded as a part of the cost basis of the shares within treasury stock.

The cost of shares repurchased may differ from the repurchases of common stock amounts in the consolidated statements of cash flows due to unsettled share repurchases at the end of a period and excise taxes incurred on share repurchases.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Oct. 29, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

The fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, rather than the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:

•Level 1: observable inputs such as quoted prices in active markets for identical assets or liabilities;

•Level 2: inputs other than quoted prices in active markets in Level 1 that are either directly or indirectly observable; and

•Level 3: unobservable inputs for which little or no market data exists, therefore requiring management judgment to develop the Company’s own models with estimates and assumptions.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the assets and liabilities that are measured at fair value on a recurring basis:

	October 29, 2023		January 29, 2023
in millions	Fair Value (Level 2)		Fair Value (Level 2)
Derivative agreements – assets	$	—	$	—
Derivative agreements – liabilities	(1,073)		(778)
Total	$	(1,073)	$	(778)

The fair values of our derivative instruments are determined using an income approach and Level 2 inputs, which primarily include the respective interest rate forward curves and discount rates. Our derivative instruments are discussed further in Note 4.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Long-lived assets, goodwill, and other intangible assets are subject to nonrecurring fair value measurement for the assessment of impairment.

During the third quarter of fiscal 2023, we completed our annual assessment of the recoverability of goodwill for our U.S., Canada, and Mexico reporting units, using a quantitative approach. The quantitative test for goodwill impairment was performed by determining the fair value of the reporting units using a combination of discounted cash flow and market-based approaches. The results of our quantitative analysis indicated that the fair value of each of the reporting units substantially exceeded its respective carrying value, including goodwill. Additionally, during the third quarter of fiscal 2023, we completed our annual assessment of the recoverability of our indefinite-lived intangibles based on quantitative factors and concluded no impairment losses should be recognized.

We did not have any material assets or liabilities that were measured at fair value on a nonrecurring basis during the three and nine months ended October 29, 2023 or October 30, 2022.

Other Fair Value Disclosures

The carrying amounts of cash and cash equivalents, receivables, and accounts payable approximate fair value due to their short-term nature. The following table presents the aggregate fair values and carrying values of our senior notes:

	October 29, 2023				January 29, 2023
in millions	Fair Value (Level 1)		Carrying Value		Fair Value (Level 1)		Carrying Value
Senior notes	$	33,135	$	38,635	$	38,537	$	39,908

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WEIGHTED AVERAGE COMMON SHARES

9 Months Ended

Oct. 29, 2023

Earnings Per Share [Abstract]

Weighted Average Common Shares

WEIGHTED AVERAGE COMMON SHARES

The following table presents the reconciliation of our basic to diluted weighted average common shares as well as the number of anti-dilutive securities excluded from diluted weighted average common shares:

in millions	Three Months Ended		Nine Months Ended
	October 29, 2023	October 30, 2022	October 29, 2023	October 30, 2022
Basic weighted average common shares	996	1,020	1,002	1,024
Effect of potentially dilutive securities (1)	3	3	3	4
Diluted weighted average common shares	999	1,023	1,005	1,028
Anti-dilutive securities excluded from diluted weighted average common shares	1	1	1	1

—————

(1)    Represents the dilutive impact of stock-based awards.

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CONTINGENCIES	9 Months Ended
	Oct. 29, 2023
Commitments and Contingencies Disclosure [Abstract]
Contingencies	CONTINGENCIESWe are involved in litigation arising in the normal course of business. In management’s opinion, any such litigation is not expected to have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.

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Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Oct. 29, 2023	Oct. 30, 2022
Pay vs Performance Disclosure
Net earnings	$ 3,810	$ 4,339	$ 12,342	$ 13,743

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Insider Trading Arrangements	3 Months Ended
	Oct. 29, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Oct. 29, 2023

Accounting Policies [Abstract]

Business

Business

The Home Depot, Inc., together with its subsidiaries (the “Company,” “Home Depot,” “we,” “our” or “us”), is a home improvement retailer that sells a wide assortment of building materials, home improvement products, lawn and garden products, décor items, and facilities maintenance, repair and operations products, in stores and online. We also provide a number of services, including home improvement installation services and tool equipment rental. We operate in the U.S. (including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam), Canada, and Mexico, each representing one of our three operating segments, which we aggregate into one reportable segment due to the similar nature of their operations and economic characteristics.

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2022 Form 10-K.

Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

ASU No. 2022-04. In September 2022, the FASB issued ASU No. 2022-04, “Liabilities—Supplier Finance Programs (Topic 405-50): Disclosure of Supplier Finance Program Obligations,” to enhance the transparency of supplier finance programs used by an entity in connection with the purchase of goods and services. The standard requires entities that use supplier finance programs to disclose the key terms, including a description of payment terms, the confirmed amount outstanding under the program at the end of each reporting period, a description of where those obligations are presented on the balance sheet, and an annual rollforward, including the amount of obligations confirmed and the amount paid during the period. The guidance does not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs. ASU No. 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the required rollforward information, which is effective for fiscal years beginning after December 15, 2023. On January 30, 2023, we adopted ASU No. 2022-04 with no impact to our consolidated financial condition, results of operations, or cash flows.

We have a supplier finance program whereby we have entered into payment processing agreements with several financial institutions. Under these agreements, the financial institutions act as our paying agents with respect to accounts payable due to certain suppliers. Participating suppliers may, at their sole discretion, elect to receive payment for one or more of our payment obligations, prior to their scheduled due dates, at a discounted price from participating financial institutions. We are not a party to the agreements between the participating financial institutions and the suppliers in connection with the program, and our rights and obligations to our suppliers are not impacted. We do not reimburse suppliers for any costs they incur for participation in the program. We have not pledged any assets as security or provided any guarantees as part of the program. We have no economic interest in our suppliers’ decisions to participate in the program. Our responsibility is limited to making payment to the respective financial institution according to the terms originally negotiated with the supplier, regardless of whether the supplier elects to receive early payment from the financial institution.

The payment terms we negotiate with our suppliers are consistent, irrespective of whether a supplier participates in the program. Our current payment terms with a majority of our suppliers generally range from 30 to 60 days, which we deem to be commercially reasonable. Our outstanding payment obligations under our supplier finance program were $309 million at October 29, 2023 and $480 million at January 29, 2023, and are recorded within accounts payable on the consolidated balance sheets. The associated payments are included in operating activities within the consolidated statements of cash flows.

ASU No. 2020-04. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate discontinued as a result of reference rate reform. ASU No. 2020-04 is effective as of March 12, 2020 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. This guidance was subsequently amended by ASU No. 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848,” which was effective upon issuance in December 2022 and extended the temporary relief provided by Topic 848 through December 31, 2024.

During the second quarter of fiscal 2023, we amended our existing fixed-to-variable interest rate swap agreements, which were designated as fair value hedges, to transition the variable component of such agreements from LIBOR to the Secured Overnight Financing Rate (“SOFR”). Concurrent with these amendments, we elected certain of the optional expedients provided in Topic 848, which allow us to maintain our designation of fair value hedge accounting and application of the shortcut method for these agreements. The adoption of this guidance did not have a material impact on our consolidated financial condition, results of operations, or cash flows.

Recently Issued Accounting Pronouncements

Recent accounting pronouncements pending adoption are either not applicable or are not expected to have a material impact on our consolidated financial condition, results of operations, or cash flows.

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NET SALES (Tables)

9 Months Ended

Oct. 29, 2023

Revenue from Contract with Customer [Abstract]

Summary of Net Sales, Classified by Geography

The following table presents net sales, classified by geography:

	Three Months Ended				Nine Months Ended
in millions	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Net sales – in the U.S.	$	34,544	$	35,784	$	108,242	$	111,834
Net sales – outside the U.S.	3,166		3,088		9,641		9,738
Net sales	$	37,710	$	38,872	$	117,883	$	121,572

Summary of Net Sales by Products and Services

The following table presents net sales by products and services:

	Three Months Ended				Nine Months Ended
in millions	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Net sales – products	$	36,156	$	37,448	$	113,405	$	117,261
Net sales – services	1,554		1,424		4,478		4,311
Net sales	$	37,710	$	38,872	$	117,883	$	121,572

Summary of Net Sales by Major Product Line

The following table presents major product lines and the related merchandising departments (and related services):

Major Product Line	Merchandising Departments
Building Materials	Building Materials, Electrical/Lighting, Lumber, Millwork, and Plumbing
Décor	Appliances, Décor/Storage, Flooring, Kitchen and Bath, and Paint
Hardlines	Hardware, Indoor Garden, Outdoor Garden, and Tools

The following table presents net sales by major product line (and related services):

	Three Months Ended				Nine Months Ended
in millions	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Building Materials	$	14,744	$	15,343	$	44,214	$	46,095
Décor	12,653		13,070		38,315		40,040
Hardlines	10,313		10,459		35,354		35,437
Net sales	$	37,710	$	38,872	$	117,883	$	121,572

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PROPERTY AND LEASES (Tables)

9 Months Ended

Oct. 29, 2023

Leases [Abstract]

Summary of Assets and Liabilities Related to Operating and Finance Leases

The following table presents the consolidated balance sheet classification related to operating and finance leases:

in millions	Consolidated Balance Sheet Classification	October 29, 2023		January 29, 2023
Assets:
Operating lease assets	Operating lease right-of-use assets	$	7,071	$	6,941
Finance lease assets (1)	Net property and equipment	2,860		2,899
Total lease assets		$	9,931	$	9,840
Liabilities:
Current:
Operating lease liabilities	Current operating lease liabilities	$	1,026	$	945
Finance lease liabilities	Current installments of long-term debt	262		231
Long-term:
Operating lease liabilities	Long-term operating lease liabilities	6,300		6,226
Finance lease liabilities	Long-term debt, excluding current installments	3,032		3,054
Total lease liabilities		$	10,620	$	10,456

—————

(1) Finance lease assets are recorded net of accumulated amortization of $1.2 billion as of both October 29, 2023 and January 29, 2023.

Summary of Supplemental Non-Cash Information Related to Leases

The following table presents supplemental non-cash information related to leases:

	Nine Months Ended
in millions	October 29, 2023		October 30, 2022
Lease assets obtained in exchange for new operating lease liabilities	$	791	$	1,308
Lease assets obtained in exchange for new finance lease liabilities	261		234

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STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Oct. 29, 2023

Equity [Abstract]

Summary of Reconciliation of the Number of Shares of our Common Stock Outstanding and Cash Dividends Per Share

The following table presents a reconciliation of the number of shares of our common stock outstanding and cash dividends per share:

shares in millions	Three Months Ended				Nine Months Ended
	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Common stock:
Shares at beginning of period	1,796		1,793		1,794		1,792
Shares issued under employee stock plans, net	—		—		2		1
Shares at end of period	1,796		1,793		1,796		1,793
Treasury stock:
Shares at beginning of period	(795)		(769)		(778)		(757)
Repurchases of common stock	(5)		(4)		(22)		(16)
Shares at end of period	(800)		(773)		(800)		(773)
Shares outstanding at end of period	996		1,020		996		1,020
Cash dividends per share	$	2.09	$	1.90	$	6.27	$	5.70

Summary of Repurchases of Common Stock

The following table presents information about our repurchases of common stock, all of which were completed through open market purchases:

in millions	Three Months Ended				Nine Months Ended
	October 29, 2023		October 30, 2022		October 29, 2023		October 30, 2022
Total number of shares repurchased	5		4		22		16
Total cost of shares repurchased (1)	$	1,516	$	1,224	$	6,561	$	4,994

—————

(1) Effective January 1, 2023, the Company’s share repurchases are subject to a 1% excise tax as a result of the Inflation Reduction Act of 2022. Excise taxes incurred on share repurchases represent direct costs of the repurchase and are recorded as a part of the cost basis of the shares within treasury stock.

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Oct. 29, 2023

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the assets and liabilities that are measured at fair value on a recurring basis:

	October 29, 2023		January 29, 2023
in millions	Fair Value (Level 2)		Fair Value (Level 2)
Derivative agreements – assets	$	—	$	—
Derivative agreements – liabilities	(1,073)		(778)
Total	$	(1,073)	$	(778)

Summary of Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The following table presents the aggregate fair values and carrying values of our senior notes:

	October 29, 2023				January 29, 2023
in millions	Fair Value (Level 1)		Carrying Value		Fair Value (Level 1)		Carrying Value
Senior notes	$	33,135	$	38,635	$	38,537	$	39,908

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WEIGHTED AVERAGE COMMON SHARES (Tables)

9 Months Ended

Oct. 29, 2023

Earnings Per Share [Abstract]

Summary of Weighted Average Number of Shares

The following table presents the reconciliation of our basic to diluted weighted average common shares as well as the number of anti-dilutive securities excluded from diluted weighted average common shares:

in millions	Three Months Ended		Nine Months Ended
	October 29, 2023	October 30, 2022	October 29, 2023	October 30, 2022
Basic weighted average common shares	996	1,020	1,002	1,024
Effect of potentially dilutive securities (1)	3	3	3	4
Diluted weighted average common shares	999	1,023	1,005	1,028
Anti-dilutive securities excluded from diluted weighted average common shares	1	1	1	1

—————

(1)    Represents the dilutive impact of stock-based awards.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions	9 Months Ended
	Oct. 29, 2023 USD ($) segment	Jan. 29, 2023 USD ($)
Supplier Finance Program [Line Items]
Number of operating segments	3
Number of reportable segments	1
Supplier finance program | $	$ 309	$ 480
Minimum
Supplier Finance Program [Line Items]
Payment timing period	30 days
Maximum
Supplier Finance Program [Line Items]
Payment timing period	60 days

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NET SALES - Summary of Net Sales (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Oct. 29, 2023	Oct. 30, 2022
Disaggregation of Revenue [Line Items]
Net sales	$ 37,710	$ 38,872	$ 117,883	$ 121,572
Products
Disaggregation of Revenue [Line Items]
Net sales	36,156	37,448	113,405	117,261
Services
Disaggregation of Revenue [Line Items]
Net sales	1,554	1,424	4,478	4,311
Building Materials
Disaggregation of Revenue [Line Items]
Net sales	14,744	15,343	44,214	46,095
Décor
Disaggregation of Revenue [Line Items]
Net sales	12,653	13,070	38,315	40,040
Hardlines
Disaggregation of Revenue [Line Items]
Net sales	10,313	10,459	35,354	35,437
In the U.S.
Disaggregation of Revenue [Line Items]
Net sales	34,544	35,784	108,242	111,834
Outside the U.S.
Disaggregation of Revenue [Line Items]
Net sales	$ 3,166	$ 3,088	$ 9,641	$ 9,738

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NET SALES - Narrative (Details) - USD ($) $ in Billions	9 Months Ended
	Oct. 29, 2023	Jan. 29, 2023
Revenue from Contract with Customer [Abstract]
Deferred revenue	$ 1.8	$ 2.0
General redemption period	6 months
Gift card performance obligations	$ 1.0	$ 1.1

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PROPERTY AND LEASES - Narrative (Details) - USD ($) $ in Billions	Oct. 29, 2023	Jan. 29, 2023
Leases [Abstract]
Accumulated depreciation and amortization	$ 28.1	$ 26.6

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PROPERTY AND LEASES - Summary of Assets and Liabilities Related to Operating and Finance Leases (Details) - USD ($) $ in Millions	Oct. 29, 2023	Jan. 29, 2023
Assets
Operating lease assets	$ 7,071	$ 6,941
Finance lease assets	2,860	2,899
Total lease assets	9,931	9,840
Current:
Operating lease liabilities	1,026	945
Finance lease liabilities	262	231
Long-term:
Operating lease liabilities	6,300	6,226
Finance lease liabilities	3,032	3,054
Total lease liabilities	10,620	10,456
Finance lease asset accumulated amortization	$ 1,200	$ 1,200

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PROPERTY AND LEASES - Summary of Supplemental Non-Cash Information Related to Leases (Details) - USD ($) $ in Millions	9 Months Ended
	Oct. 29, 2023	Oct. 30, 2022
Leases [Abstract]
Lease assets obtained in exchange for new operating lease liabilities	$ 791	$ 1,308
Lease assets obtained in exchange for new finance lease liabilities	$ 261	$ 234

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DEBT AND DERIVATIVE INSTRUMENTS - Short-term Debt (Details) - USD ($) $ in Billions	1 Months Ended		9 Months Ended
	Jul. 30, 2023	Apr. 30, 2023	Oct. 29, 2023	Jan. 29, 2023
Debt Instrument [Line Items]
Short-term debt			$ 0.0	$ 0.0
2.70% Senior Notes Due April 2023 | Senior Notes
Debt Instrument [Line Items]
Repayments of debt		$ 1.0
Debt instrument interest rate (in percentage)		2.70%
Commercial Paper
Debt Instrument [Line Items]
Maximum borrowing capacity of credit facility			5.0
Maximum amount outstanding during period			1.5
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity of credit facility			5.0
Revolving Credit Facility | 5-year Back-up Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity of credit facility			$ 3.5
Expiration period			5 years
Revolving Credit Facility | 364-day Back-up Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity of credit facility	$ 1.5		$ 1.5
Expiration period	364 days		364 days

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DEBT AND DERIVATIVE INSTRUMENTS - Derivative Instruments and Hedging Activities (Details) - USD ($) $ in Millions	Oct. 29, 2023	Jan. 29, 2023
Derivative [Line Items]
Cash collateral received	$ 926	$ 634
Interest Rate Swap | Fair Value Hedging
Derivative [Line Items]
Notional amount	5,400	5,400
Fair value agreements	$ 1,100	$ 778

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STOCKHOLDERS' EQUITY - Summary of Reconciliation of the Number of Shares of our Common Stock Outstanding and Cash Dividends Per Share (Details) - $ / shares shares in Millions	3 Months Ended		9 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Oct. 29, 2023	Oct. 30, 2022	Jan. 29, 2023
Common stock:
Shares at beginning of period (in shares)	1,796	1,793	1,794	1,792
Shares issued under employee stock plans, net (in shares)	0	0	2	1
Shares at end of period (in shares)	1,796	1,793	1,796	1,793
Treasury stock:
Shares at beginning of period (in shares)	(795)	(769)	(778)	(757)
Repurchases of common stock (in shares)	(5)	(4)	(22)	(16)
Shares at end of period (in shares)	(800)	(773)	(800)	(773)
Shares outstanding at end of period (in shares)	996	1,020	996	1,020	1,016
Cash dividends per share (in dollars per share)	$ 2.09	$ 1.90	$ 6.27	$ 5.70

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STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($) $ in Billions	Oct. 29, 2023	Aug. 31, 2023	Aug. 31, 2022
2023 Share Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Share repurchase amount		$ 15.0
Remaining authorized repurchase amount	$ 13.8
2022 Share Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Share repurchase amount			$ 15.0

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STOCKHOLDERS' EQUITY - Summary of Repurchases of Common Stock (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Oct. 29, 2023	Oct. 30, 2022
Equity [Abstract]
Total number of shares repurchased	5	4	22	16
Total cost of shares repurchased	$ 1,516	$ 1,224	$ 6,561	$ 4,994

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FAIR VALUE MEASUREMENTS - Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Fair Value Measurements Recurring - Fair Value (Level 2) - USD ($) $ in Millions	Oct. 29, 2023	Jan. 29, 2023
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items]
Derivative agreements – assets	$ 0	$ 0
Derivative agreements – liabilities	(1,073)	(778)
Total	$ (1,073)	$ (778)

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FAIR VALUE MEASUREMENTS - Narrative (Details)	3 Months Ended
	Oct. 29, 2023 USD ($)
Fair Value Disclosures [Abstract]
Impairment of intangible assets	$ 0

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FAIR VALUE MEASUREMENTS - Summary of Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis (Details) - USD ($) $ in Millions	Oct. 29, 2023	Jan. 29, 2023
Fair Value, Assets and Liabilities Measured on a Nonrecurring Basis [Line Items]
Carrying value of senior notes	$ 38,635	$ 39,908
Senior notes | Fair Value Measurements Nonrecurring | Fair Value (Level 1)
Fair Value, Assets and Liabilities Measured on a Nonrecurring Basis [Line Items]
Fair value of senior notes	$ 33,135	$ 38,537

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WEIGHTED AVERAGE COMMON SHARES (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Oct. 29, 2023	Oct. 30, 2022	Oct. 29, 2023	Oct. 30, 2022
Reconciliation of Basic to Diluted Weighted Average Common Shares:
Basic weighted average common shares (in shares)	996	1,020	1,002	1,024
Effect of potentially dilutive securities (in shares)	3	3	3	4
Diluted weighted average common shares (in shares)	999	1,023	1,005	1,028
Anti-dilutive securities excluded from diluted weighted average common shares (in shares)	1	1	1	1