Home Depot is warning shoppers that some prices could soon rise. The company said tariffs are driving up costs on imported goods.
Until now, the nation’s largest home improvement retailer has been cautious about saying how tariffs might affect customers. But on Tuesday, after releasing quarterly earnings, CFO Richard McPhail confirmed increases are coming.
“For some imported goods, tariff rates are significantly higher today than they were at this time last quarter,” McPhail told the Wall Street Journal. The company later confirmed his remarks to CNN. “So as you would expect, there will be modest price movement in some categories, but it won’t be broad based.”
Just three months ago, Home Depot had declined to speculate on pricing. At the time, it only suggested tariffs might force it to stop carrying certain items altogether.
Roughly half of Home Depot’s inventory comes from outside the U.S. The company has said it is working to diversify suppliers so that no single country provides more than 10% of its products.
Even with sales rising 5% from last year, profit slipped slightly in the latest quarter. Net income fell 0.2%, with higher operating costs weighing on results. Executives now expect full-year earnings per share to decline 2%, pointing to high interest rates and economic uncertainty.
“Certainly some relief on mortgage rates in particular could help,” CEO Ted Decker said on the earnings call. He added that most customers are holding off on big projects not because of prices or labor, but because of overall uncertainty in the economy.
Still, executives stressed that demand isn’t disappearing. “They’re deferring projects. They’re not canceling projects,” McPhail said. “Home improvement demand persists. And so our job is to position ourselves to be ready for that.”