Three U.S. Retail Kings, Three Tariff StrategiesIn an environment of trade tensions and tariffs threatening to raise costs, America’s retail giants have taken very different paths to protect their profitability. Below, we analyze how Home Depot, Costco, and Walmart have managed the latest tariffs and how this shows up in their net profits for the two most recent fiscal years.
1. Home Depot: Absorbing the Cost and Diversifying Supply
o Net profit 2023: USD 17,105 M
o Net profit 2024: USD 14,806 M (–13.5 %)
In an unusual move for the sector, Home Depot refused to pass Trump’s tariff costs onto consumers, declaring “no way” they would raise prices. Instead, they bolstered their network of professional contractors and acquired SRS Distribution, allowing them to handle large volumes at lower cost and more competitive prices. Their geographic diversification now means no country outside the U.S. accounts for more than 10 % of their sourcing.
o Q1 FY25 sales: USD 39,860 M (↑ 9 % YoY)
o Q1 FY25 net profit: USD 3,400 M (–5.6 % YoY)
o Q2 FY25 guide: sales growth +2.8 %, maintaining solid EBITDA without price hikes.
o Current share price (20/05/25): USD 377.05 (YTD +2.45 %)
o 12-month forecast range: USD 360–475; consensus target: USD 427.50.
2. Costco: Memberships as an Inflation Shield
o Net profit 2023: USD 6,292 M
o Net profit 2024: USD 7,367 M (+17.1 %)
Rather than splashy headlines, Costco sticks to its tried-and-true formula: razor-thin margins and membership fees. By keeping margins tight on high-turnover goods and offsetting with subscription revenue, the company has boosted its member base and renewals, and optimized its internal supply chain to minimize external cost impacts.
o Q1 FY25 sales: USD 60,990 M (↑ 7.5 % YoY)
o Q1 FY25 net profit: USD 1,798 M (↑ 13.1 % YoY)
o Q2 FY25 (12 weeks): sales USD 62,530 M (↑ 9.1 % YoY); net profit USD 1,788 M
o Current share price (20/05/25): USD 1,036.82 (YTD +13.43 %)
o 12-month forecast range: USD 907–1,205; consensus target: USD 1,082.14.
3. Walmart: Selective Price Tweaks and Omnichannel Push
o Net profit 2023: USD 13,670 M
o Net profit 2024: USD 15,500 M (+13.4 %)
Unlike Home Depot, Walmart has been more willing to adjust prices on tariff-hit categories, drawing some White House criticism. Still, they closed Q1 FY25 with sales of USD 165,600 M (↑ 2.5 % YoY) and net profit of USD 4,480 M (–12.1 % YoY). For Q2, they anticipate sales growth of 3.5–4.5 % versus USD 167,800 M a year ago, thanks to their e-commerce and subscription services push. Their omnichannel strategy doubles down on platform investment, “click & collect,” and expanding digital delivery and subscription offerings.
o Current share price (20/05/25): USD 97.80 (YTD +8.81 %)
o 12-month forecast range: USD 91–120; consensus target: USD 109.33.
Conclusion
Peering out the windows of their vast megastores, Home Depot, Costco, and Walmart face the same tariff storm with very different navigational charts. Home Depot chose to resist price increases, absorbing extra costs and reengineering its supply chain to limit any single foreign supplier to under 10 %—a temporary margin sacrifice for long-term stability. At the other extreme, Costco has built an impenetrable dam with its membership model and razor-thin margins, where member loyalty and a fine-tuned internal logistics engine act as a natural shield against inflation and tariffs. And in between, Walmart sharpens its selective pricing knife on tariff-hit goods while flexing full omnichannel muscle—from “click & collect” to beefing up digital subscription and delivery services. Three distinct survival stories, yet one shared endpoint: weathering the tariff tempest without losing the rhythm of their financial performance.
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