What drove Home Depot's gross profit growth in Q3 2025?

Home Depot's gross profit growth in Q3 2025 was primarily driven by:

1. **Acquisitions**: The acquisition of SRS contributed significantly to the growth in gross profit. This acquisition is expected to add about $10 billion in annualized revenue, which is a substantial portion of the 2025 consensus estimate.
2. **Strategic Investments**: Home Depot's infrastructure investment in supply chain and logistics has enhanced its competitiveness in retail. This strategic focus likely led to improved operational efficiencies, which in turn supported gross profit growth.
3. **Revenue Growth**: Gross profit is directly influenced by revenue growth. Home Depot's total revenue increased by 6.6% year-over-year to $40.2 billion, surpassing estimates. This revenue growth, partly driven by factors such as normalized weather patterns and strategic supply chain enhancements, provided the foundation for gross profit expansion.

In summary, Home Depot's gross profit growth in Q3 2025 was driven by strategic acquisitions, investments in infrastructure, and robust revenue growth.