Risk factor changes · HD

What changed in Home Depot's risk factors

Item 1A (Risk Factors) of Home Depot's FY2026 10-K compared with its FY2025 10-K, sentence by sentence.

Newer: 10-K filed 2026-03-18 · Older: 10-K filed 2025-03-21

New in the latest 10-K 19

• These disclosures reflect the Company s beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future.
• References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
• These trends include those driven by changes in the macroeconomic or political environment, geopolitical tensions or conflicts, military conflicts, or civil unrest, as well as unexpected weather conditions, natural disasters, or public health issues (including pandemics or quarantines and related impacts) that impact our customers.
• New channels and tools to enhance the customer experience appear and change rapidly, and some of those technologies, such as generative and agentic AI tools, may dramatically change customer shopping and buying habits.
• Fiscal 2025 Form 10-K 13 Table of Contents Disruptions in our customer-facing technology infrastructure could impair our interconnected experience strategy and give rise to negative customer experiences, damage our brand and reputation and adversely impact our sales.
• Despite our efforts, our cybersecurity risk management processes may not be fully implemented, complied with or effective in preventing or mitigating future cybersecurity risks.
• The availability of AI may enable new types of threat actors who may not otherwise have had the capabilities to engage in malicious activity to do so, or may enhance the capabilities of nation-state actors or organizing or coordinating groups to carry out attacks, or may generally enable novel types of attacks to be developed and deployed.
• Complying with current or contemplated information security, cybersecurity, data privacy, data protection, and data processing laws and regulations (including reporting and disclosure regimes), or any failure to comply, could cause us to incur substantial costs.
• As we offer new payment options to our customers, we may be subject to additional rules, regulations, and compliance requirements, and higher fraud losses.
• Natural disasters, unseasonable, unexpected or extreme weather conditions, as well as other catastrophic or uncharacteristic events, could impact our operations and financial results, seasonal events such as storms may impact sales compared to prior periods, and the potential impacts of catastrophic or uncharacteristic events may lead to changes in demand or availability of products or cause business interruptions.
• Demand for certain of our products has historically been influenced by the occurrence of seasonal events, such as storms.
• The impact of these events on our sales varies depending on their location, frequency and magnitude.
• Sustained periods without such events can lead, and in the past have led, to lower sales compared to prior periods.
• Furthermore, our delivery operations and reliance on third-party carriers expose us to potential liability for property damage, personal injury, or vehicular accidents, which Fiscal 2025 Form 10-K 18 Table of Contents could result in financial losses and reputational harm.
• For instance, the high interest rate environment that persisted throughout fiscal 2025 and the significant increase in home prices in recent years have impacted housing affordability.
• Together, these factors have contributed to historically low levels of housing turnover, which has reduced demand for projects and other purchases associated with buying and selling a home.
• Following the recent U.S.
• Supreme Court decision that struck down tariffs previously imposed under the International Emergency Economic Powers Act, there is additional uncertainty regarding the U.S. tariff regime, and the imposition by the U.S. government of new or different tariffs under different authority.
• If we are unable to mitigate the impact of product cost inflation through vendor negotiations and other strategic initiatives, we may need to increase prices to a point which could negatively impact consumer demand for our products.

Reworded 149

Removed words are struck through; added words are highlighted.

• STRATEGIC RISKS Strong competition could adversely affect prices and demand for our products and services and could decrease our market share.
• As a result, we face competition for customers for our products and services from a variety of retailers, retailers (including those operating reseller marketplaces), suppliers, service providers, and distributors and manufacturers that sell products directly to their respective customer bases.
• With respect to some products and services, we also compete Fiscal 2024 Form 10-K 9 Table of Contents with specialty design stores, showrooms, discount stores, paint stores, specialty and mass digital retailers, warehouse clubs, MRO distributors, national and local wholesale supply distributors, home d cor retailers, and other retailers, as well as with providers of home improvement services and tool and equipment rental.
• The internet facilitates Online and other digital capabilities, as well as AI tools, facilitate competitive entry, price transparency, and comparison shopping, increasing the level of competition we face.
• We also compete based on store and branch location and appearance, presentation of merchandise, and ease of shopping experience throughout every step of the customer s project, from inspiration and research to any post-purchase support.
• Our Pros also look for dedicated sales support, competitive credit and pricing options, project planning tools, professional and reliable deliveries, and product depth and job lot quantities, particularly for their complex purchase project needs.
• Furthermore, with respect to delivery options, customers are seeking faster and/or guaranteed delivery times, real-time updates on delivery status, low-price or free shipping, and/or convenient pickup options.
• Our ability to be competitive on delivery and pickup times, options and costs depends on many factors, including leveraging the momentum of our investments in our supply chain and our interconnected retail capabilities to further enhance the customer shopping experience.
• If we are unable to timely and appropriately respond to these competitive pressures, including through the delivery of a superior interconnected customer experience or through maintenance of effective sales and marketing, advertising or promotional programs leveraging both our digital and physical platforms, our market share and our financial performance could be adversely affected.
• Fiscal 2025 Form 10-K 10 Table of Contents We may not timely identify or effectively respond to customer needs, expectations or trends, which could adversely affect our relationship with our customers, the demand for our products and services, and our market share.
• The success of our business depends in part on our ability to identify and respond promptly to evolving trends in demographics; demographics and shifts in customer preferences, expectations and needs; changes in the macroeconomic or political environment; and unexpected weather conditions, natural disasters, or public health issues (including pandemics and related impacts) that impact our customers, needs, while also managing appropriate inventory levels in our stores, branches and distribution or fulfillment centers and maintaining an excellent customer experience.
• Our ability to collect and use that data, however, is subject to a number of external factors, including the impact of legislation or regulations governing data privacy, data-driven technologies such as artificial intelligence, AI, and data security, as well as customer expectations around data collection, retention, and use.
• Customer expectations about the methods by which they find, evaluate, purchase and receive products or services are also becoming more demanding. evolving.
• Customers routinely and increasingly use technology and a variety of electronic devices and digital platforms to rapidly gather inspiration, compare products and prices, read product reviews, determine real-time product availability, and purchase products, and new channels and tools to enhance the customer experience appear and change rapidly. products.
• Our Pros also look for additional capabilities, including dedicated sales support, competitive credit and pricing options, project planning tools, professional and reliable deliveries, and product depth and job lot quantities, particularly for their complex purchase project needs.
• Once products are purchased, customers seek alternate options for delivery of those products, including advance ordering through digital platforms for Pros, and they often expect quick, timely, and low-price or free delivery, real-time updates on delivery status, and/or convenient pickup or delivery options.
• We must continually anticipate and adapt to these changes in the planning, shopping and purchasing process by continuing to adjust and enhance the online and in-store customer experience as well as our delivery options.
• The coordinated operation of our network of physical Fiscal 2024 Form 10-K 10 Table of Contents stores, branches, distribution facilities, and online platforms is fundamental to the success of our interconnected strategy.
• In addition, as our customers continue to leverage our enhanced interconnected shopping and fulfillment options, a greater concentration of online sales with direct fulfillment could result in a reduction in the amount of traffic in our stores, which would, in turn, reduce the opportunities for cross-selling of merchandise that such traffic creates and could reduce our overall sales and adversely affect our financial performance.
• A greater concentration of online sales with direct fulfillment could also result in higher costs for delivery, potentially impacting impact our profit margins.
• Failure to provide a relevant and effective customer experience in a timely manner that keeps pace with technological developments and dynamic customer expectations; to maintain appropriate inventory; to provide quick and low-price cost-effective or free delivery alternatives alternatives, real-time updates on delivery status, and convenient pickup options; to differentiate the customer experience for our primary customer groups; to effectively implement an increasingly appropriately localized merchandising assortment; or to otherwise timely identify or respond to changing customer preferences, expectations and home improvement needs could adversely affect our relationship with our customers, the demand for our products and services, and our market share.
• STRATEGIC RISKS A positive brand and reputation are critical to our business success, and, if our brand and reputation are damaged, it could negatively impact our relationships with our customers, associates and jobseekers, suppliers, service providers, vendors, shareholders, regulators, and the communities we serve, and, consequently, our business, results of operations and the price of our stock.
• Our brand and reputation are critical to attracting customers, associates and jobseekers, suppliers suppliers, service providers, and vendors to do business with us.
• We must continue to manage and protect our brand and reputation.
• Fiscal 2025 Form 10-K 9 Table of Contents Negative incidents can erode trust and confidence quickly, and adverse publicity about us, regardless of its accuracy or accuracy, the reputability of its source, source and whether we are involved in the incident, could damage our brand and reputation; undermine our customers confidence in us; reduce demand for our products and services, including as a result of boycotts; affect our ability to recruit, engage, motivate and retain associates; attract regulatory scrutiny, investigations scrutiny or investigations; lead to litigation; and impact our relationships with current and potential suppliers and vendors.
• Our Third party actions, including our suppliers , service providers , and vendors business practices and positions positions, may also be attributed to us, regardless of the Company s actions, meaning the actions of third parties pose similar risks to our brand and reputation.
• Partnerships with celebrities and social media content creators may also expose us to brand and reputational risks.
• Further, our actual or perceived position or lack of position on social, environmental, governance, political, public policy, regulatory, economic, geopolitical, or other sensitive issues, and any perceived lack of transparency about those matters, could harm our reputation with certain groups and attract regulatory scrutiny, investigations, litigation, or boycotts.
• In addition, we could be criticized for the scope or nature of initiatives or goals related to these matters, or for any revisions to or failure to achieve these goals on a timely basis or at all.
• If data, processes, and reporting related to these matters are incomplete or inaccurate, we could face regulatory scrutiny, scrutiny or investigations, litigation and/or adverse reputational impacts.
• Customers are also increasingly using social media to provide feedback and information about the Company, including our products and services, in a manner that can be quickly and broadly disseminated.
• Negative sentiment about the Company shared over social media, or misinformation from fraudulent accounts impersonating the Company, could impact our brand and reputation, whether or not it is based in fact.
• The execution of initiatives to implement deliver our interconnected retail strategy experience could adversely impact our business operations or financial results, and these initiatives might not provide the anticipated benefits.
• Over the past several years, we have made significant investments to execute our deliver a frictionless interconnected retail strategy, experience, including enhancing and expanding our supply chain, developing differentiated capabilities for our customers, including enhancements and improvements to our digital capabilities, expanding our store base, and making strategic acquisitions.
• These investments are designed to streamline our operations to allow our associates to continue to provide high-quality service to our customers; simplify customer interactions; provide our customers with a more interconnected shopping experience; expand our sales to Pros and better address their needs for complex purchase needs; projects; and create the fastest, most efficient, and most reliable delivery network for home improvement products.
• Fiscal 2025 Form 10-K 11 Table of Contents Executing our interconnected retail strategy experience requires continual investment in our operations and information technology systems, as well as the development and execution of new processes, systems and support.
• In addition, our stores are a key element critical component of our interconnected retail strategy, experience, serving as the hub of our customers interconnected shopping experience. journey.
• We also need to identify and secure available locations with appropriate characteristics for new stores stores, branches, and branches supply chain facilities to ensure we can continue to serve our customers effectively.
• Fiscal 2024 Form 10-K 11 Table of Contents We must effectively manage the volume, timing, nature, location, and cost of our investments, projects and changes.
• The cost and potential problems, defects of design, and interruptions associated with the implementation of these initiatives, including those associated with managing third-party service providers, employing new online tools and services, implementing new technologies using artificial intelligence, AI, implementing and restructuring support systems and processes, securing appropriate store and other facility locations, and addressing impacts on inventory levels, could disrupt or reduce the efficiency of our operations in the near term, lead to product availability issues, create complexity in our systems and operations and impact our profitability.

Removed since the previous 10-K 12

• If we experience inflation or deflation at a level beyond our ability to respond effectively, we may not be able to adjust prices to sufficiently offset the effects without negatively impacting demand or margins, as applicable, or it may adversely affect our ability to compete based on price.
• Investment in our supply chain also involves significant real estate projects as we expand our distribution network, requiring us to identify and secure available locations with appropriate characteristics needed to support the different types of facilities.
• Strategic transactions may also be subject to significant regulatory uncertainty.
• Disruptions in our customer-facing technology systems could impair our interconnected retail strategy and give rise to negative customer experiences.
• Our business is subject to seasonal influences, and uncharacteristic or significant weather conditions, climate change, natural disasters, as well as other catastrophic or uncharacteristic events, could impact our operations and financial results.
• For instance, certain of the Company s suppliers have also been involved in litigation or governmental enforcement actions related to perfluoroalkyl and polyfluoroalkyl substances, also known as PFAS, and we could be exposed to similar actions.
• For instance, a number of merchandise categories were impacted by inflation in recent years due to, among other things, global supply chain disruptions and the uncertain economic and geopolitical environment.
• In an effort to address inflation, central banks raised interest rates.
• Notwithstanding recent rate cuts, the high interest rate environment that persisted throughout fiscal 2024 has adversely impacted and may continue to adversely impact demand for larger remodeling projects.
• Additionally, the inflationary outlook in the U.S. is currently uncertain, and persistent or increasing inflation could lead to a reversal of recent reductions in interest rates.
• While recent changes in the U.S. administration and Congress have and are expected to continue to lead to adoption and implementation of new laws, executive orders, regulations, policies, or reforms, the extent to which they will impact our business cannot be determined.
• If product cost inflation exceeds our ability to manage related expenses, we may not be able to offset the increases without negatively impacting consumer demand.

Source: SEC EDGAR filings, compared sentence by sentence by EdgarStack. Sentence matching is automated and may pair or split passages imperfectly; check the linked filings before relying on any passage. A software tool, not financial advice. Not affiliated with the U.S. Securities and Exchange Commission.