AddedRisk Factors
Our brand and reputation are critical to attracting customers, associates and jobseekers, suppliers, service providers, and vendors to do business with us. We must continue to manage and protect our brand and reputation.
The 10-K against last year's
134 changes: 11 added, 9 removed, 110 reworded, 4 quiet changes
10-K 0001628280-26-019436 (2026-03-18) vs 10-K 0000354950-25-000085 (2025-03-21)
The redline
The paragraph that changed most in each section
Marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
Risk Factors 279 words changed in this paragraph; it is 31% similar to last year's version.
Our financial performance depends significantly on the stability of the housing and home improvement markets, as well as general economic conditions, including changes in gross domestic product. Adverse conditions in or uncertainty about these markets, the economy, or the political or social climate could adversely impact, and we believe in some cases has adversely impacted, our customers’ confidence or financial condition, causing them to decide against purchasing home improvement products and services, causing them to delay purchasing decisions, or impacting their ability to pay for products and services. Other factors beyond our control – including unemployment and foreclosure rates; inventory loss due to theft (including as a result of organized retail crime); inflation or deflation; interest rate fluctuations, including central banks’ actions to control inflation; fuel and other energy costs; raw material or other shortages; labor and healthcare costs; the availability of financing; the state of the credit markets, including mortgages, home equity loans and consumer credit; changes in policy and regulations, including with respect to tax rates; prolonged government shutdowns; weather and natural disasters (including the potential impacts of climate change); acts of terrorism or violence, including active shooter situations; public health issues, including pandemics and related impacts; geopolitical or military conflicts or acts of war, as well as any related sanctions or other government or private responses; and civil unrest, could further adversely affect, and in certain cases has adversely affected, demand for our products and services, our costs of doing business, and our financial performance. 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.
Source: Item 1A, 10-K 0001628280-26-019436 vs Item 1A, 10-K 0000354950-25-000085
MD&A 191 words changed in this paragraph; it is 36% similar to last year's version.
On March 27, 2024, June 29, 2025, we entered into a definitive agreement to acquire SRS, GMS, a leading residential distributor of specialty trade distribution company building products, including drywall, ceilings, steel framing and other complementary construction products, through branches located across several verticals serving the professional roofer, landscaper U.S. and pool contractor. On June 18, 2024, following Canada. Under the satisfaction or waiver terms of the applicable closing conditions, merger agreement, we, through a wholly owned subsidiary, made a cash tender offer to purchase all outstanding shares of GMS common stock for $110 per share. All conditions of the offer were satisfied, including receipt of the requisite regulatory approvals, and the acquisition merger was completed on September 4, 2025. As a result of the merger, GMS became a direct subsidiary of SRS and all merger consideration was transferred. an indirect, wholly owned subsidiary of the Company. We believe the GMS acquisition of SRS will accelerate the Company’s growth with the Pro. The acquisition is expected to establish the Company enhance SRS's position as a leading specialty trade distributor across multiple verticals, complement our multi-category building materials distributor, bringing differentiated capabilities, product categories and customer relationships that are highly complementary to SRS's existing capabilities, and enable us to better serve complex project purchase occasions with the renovator/remodeler. business. Refer to Note 2 and Note 13 to our consolidated financial statements for further discussion of on the impact of the acquisition on our consolidated financial statements. acquisition.
Source: Item 7, 10-K 0001628280-26-019436 vs Item 7, 10-K 0000354950-25-000085
Legal Proceedings 154 words changed in this paragraph; it is 40% similar to last year's version.
As previously reported, in April 2021 we entered into a civil consent decree with the U.S. Department of Justice, the 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 third-party installers. In the first second quarter of fiscal 2023, 2025, we made the EPA informed us that it believes we owe certain final payment of stipulated penalties for violations by third-party installers of documentation requirements owed under the decree. We are engaged decree, and in discussions with the EPA regarding fourth quarter of fiscal 2025 the basis for the stipulated penalties we allegedly owe under the decree. While we cannot predict the decree was formally terminated. The aggregate amount of stipulated penalties we may ultimately owe paid to the EPA under the decree, decree totaled approximately $1.7 million, and 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 collected fines from corresponding fines we levy against our third-party installers. installers for this amount.
Source: Item 3, 10-K 0001628280-26-019436 vs Item 3, 10-K 0000354950-25-000085
Accounting Policies 151 words changed in this paragraph; it is 42% similar to last year's version.
ASU No. 2023-07. 2025-06. In November 2023, September 2025, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to Reportable Segment Disclosures,” the Accounting for Internal-Use Software,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The disclosure requirements included in modernize internal-use software guidance by removing all references to project stages and by clarifying the thresholds entities apply to begin capitalizing costs. ASU No. 2023-07 are required for all public entities, including entities with a single reportable segment. ASU No. 2023-07 2025-06 is effective for fiscal years beginning after December 15, 2023, 2027, and interim periods within fiscal years beginning after December 15, 2024, and early those annual reporting periods. Early adoption is permitted. The guidance is required to can be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. We adopted ASU No. 2023-07 in are currently evaluating the fourth quarter impact of fiscal 2024. The adoption of this guidance resulted in additional financial statement disclosures and had no impact to the standard on our consolidated financial condition, results of operations, or cash flows. See Note 2 which includes the disclosures resulting from our adoption of this guidance. statements.
Source: Item 8, Note 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, 10-K 0001628280-26-019436 vs Item 8, Note 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, 10-K 0000354950-25-000085
Every change, by type
Sentences and paragraphs added, removed or reworded
Sentences and paragraphs of HD's Risk Factors and MD&A, 10-K 2026-03-18 against 10-K 2025-03-21. Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier (may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, wouldAddedRisk Factors
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.
AddedRisk Factors
could result in financial losses and reputational harm. Even with adequate insurance and indemnification, our reputation as a provider of high-quality products, including both national brand names and our proprietary products, and services could suffer, damaging our reputation and impacting customer loyalty.
AddedRisk Factors
Our financial performance depends significantly on the stability of the housing and home improvement markets, as well as general economic conditions, including changes in gross domestic product. Adverse conditions in or uncertainty about these markets, the economy, or the political or social climate could adversely impact, and we believe in some cases has adversely impacted, our customers’ confidence or financial condition, causing them to
RemovedRisk Factors
RemovedRisk Factors
RemovedRisk Factors
RewordedRisk Factors
Our ability to access products from our suppliers can be, and on occasion has been, adversely affected by economic or political instability; civil unrest; geopolitical tensions or conflicts, or military conflicts or acts of war, as well as any related sanctions or other government or private responses; acts of terrorism or violence; public health issues (including pandemics and related impacts); the financial instability of suppliers; suppliers’ noncompliance with applicable laws; contract disputes or inability to maintain favorable contract terms; trade restrictions; tariffs; currency exchange rates; disruptions in our suppliers’ logistics or supply chain networks or information technology systems; inability to sell certain products due to customs actions, including regulatory enforcement inquiries, holds, detentions, and exclusions; raw material or other shortages; actual, potential or perceived noncompliance with our standards for suppliers or other controversies regarding suppliers’ business practices; practices or operations; and other factors beyond our or our suppliers’ control.
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RewordedRisk Factors
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.
RewordedRisk Factors
Disruptions, delays, failures failures, inaccuracies, or other performance issues in or with our customer-facing technology systems, either due to increased volumes, system or other technology modifications, cybersecurity incidents or attacks, information technology outages or other interruptions; interruptions, launches of new or emerging technologies; or other factors, or a failure of these systems to meet our or our customers’ expectations, could impair the value they provide, damage our brand and reputation, and adversely impact our sales, and negatively affect our relationship with our customers. sales.
RewordedRisk Factors
For example, trade tensions between the U.S. and China numerous other countries have led to a series of significant tariffs on the importation of certain product categories and tariffs have been recently proposed, and in some cases enacted, on imports from Mexico, Canada, China, and other countries. since the beginning of fiscal 2025.
RewordedRisk Factors
Furthermore, an unsafe environment or negative publicity regarding the Company or regarding incidents in or around our stores and and/or other facilities facilities, such as civil unrest, raids, protests, or similar activities, may erode diminish trust and confidence with customers, associates, or and jobseekers, which can adversely impact traffic in our stores, sales, associate morale recruiting, morale, and retention, and our brand and reputation.
RewordedRisk Factors
These factors, together with competition among potential employers, have resulted in and may continue to result in increased compensation costs, and/or may impair our ability to recruit and retain associates, which could have an adverse impact on our business operations, financial condition and results of operations.
RewordedRisk Factors
RewordedRisk Factors
These investments involve replacing existing systems, some of which are older, legacy systems that are less flexible and efficient, with successor systems; systems, and updating applications and websites; outsourcing certain technology and business processes to third-party service providers; making changes to existing systems, including the migration of applications to the cloud; maintaining or enhancing legacy systems that are not currently being replaced; designing or cost-effectively acquiring new systems with new functionality; or testing the use testing, developing and incorporation of artificial intelligence, deploying AI tools, including generative artificial intelligence. AI.
RewordedRisk Factors
In recent years, ports in the U.S. and elsewhere have been impacted by capacity constraints, port congestion and delays, periodic labor disputes, strikes, security issues, weather-related events, and natural or man-made disasters.
RewordedRisk Factors
Other factors beyond our control – including unemployment and foreclosure rates; inventory loss due to theft (including as a result of organized retail crime); inflation or deflation; interest rate fluctuations, including central banks’ actions to control inflation; tariff and trade policy; fuel and other energy costs; raw material or other shortages; labor and healthcare costs; the availability of financing; the state of the credit markets, including mortgages, home equity loans and consumer credit; changes in policy and regulations, including with respect to tax rates; prolonged government shutdowns; weather and natural disasters (including the potential impacts of climate change); acts of terrorism or violence, including active shooter situations; public health issues, including pandemics or quarantines and related impacts; geopolitical tensions or conflicts, or military conflicts or acts of war, as well as any related sanctions or other government or private responses; and civil unrest, and potential societal shifts in investment in large home improvement projects could further adversely affect, and in certain cases has adversely affected, demand for our products and services, our costs of doing business, and our financial performance.
RewordedRisk Factors
Prices of certain commodity products, including lumber and other raw materials, are historically volatile and are subject to fluctuations arising from changes in domestic and international supply and demand, inflationary or deflationary pressures, labor costs, competition, market speculation, government regulations, tariffs and trade restrictions (including retaliatory tariffs), changes in trade and other policies of the U.S. and other countries due to the change in the administration in the U.S., countries, natural disasters, geopolitical tensions or conflicts, military conflicts or acts of war, and periodic delays in delivery.
RewordedRisk Factors
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.
Quiet changesRisk Factors
As a consequence of these or other catastrophic or uncharacteristic events, we may experience interruption to our operations, increased costs, changes in customer behavior or demand, or losses of property, equipment or inventory, any of which would could adversely affect our sales and profitability.
Quiet changesRisk Factors
These changing rules, regulations and stakeholder expectations have resulted in, and are likely to may continue to result in, increased general and administrative expenses, heightened risks of litigation and enforcement actions, and increased management time and attention spent complying with or meeting such regulations and expectations.
AddedMD&A
On June 29, 2025, we entered into a definitive agreement to acquire GMS, a leading distributor of specialty building products, including drywall, ceilings, steel framing and other complementary construction products, through branches located across the U.S. and Canada. Under the terms of the merger agreement, we, through a wholly owned subsidiary, made a cash tender offer to purchase all outstanding shares of GMS common stock for $110 per share. All conditions of the offer were satisfied, including receipt of the requisite regulatory approvals, and the merger was completed on September 4, 2025. As a result of the merger, GMS became a direct subsidiary of SRS and an indirect, wholly owned subsidiary of the Company. We believe the GMS acquisition will enhance SRS's position as a leading multi-category building materials distributor, bringing differentiated capabilities, product categories and customer relationships that are highly complementary to SRS's existing business. Refer to Note 13 to our consolidated financial statements for further discussion on the acquisition.
AddedMD&A
We continue to monitor developments with respect to tariffs and other trade policy matters closely, including impacts from the recent U.S. Supreme Court decision that struck down tariffs imposed under the International Emergency Economic Powers Act. We have worked, and continue to work, diligently to diversify our global supply chain and to implement other cost mitigation initiatives. While we experienced increased costs as a result of tariffs in fiscal 2025, our actions, including diversification efforts and some price increases, along with our scale, vendor relationships, experienced internal teams, and other initiatives allowed us to effectively mitigate the impact on our results of operations. We plan to continue to assess our sourcing and other mitigation strategies to maintain a strong value proposition for our customers and believe we remain well positioned to manage the impact that tariffs in effect as of the date of this filing are expected to have on our business.
AddedMD&A
As trade policy discussions are ongoing and related developments continue to evolve, we cannot predict with certainty their ultimate impact on our business in future periods, including our results of operations and cash flows. For more information on these risks and uncertainties see Part I, Item 1A. “Risk Factors.”
AddedMD&A
On July 4, 2025, the legislation commonly referred to as the One Big Beautiful Bill Act (the “OBBBA”) was signed into law in the U.S., which contains a broad range of tax provisions, including the allowance to expense 100% of the cost of qualified property and immediate expensing of domestic research and experimental expenditures. The above mentioned provisions resulted in a reduction in our fiscal 2025 cash tax payments.
AddedMD&A
In May 2025, we terminated all three back-up credit facility agreements and simultaneously entered into a new five-year $3.5 billion credit facility scheduled to expire in May 2030 and a new 364-day $3.5 billion credit facility scheduled to expire in May 2026.
AddedMD&A
On September 4, 2025, we utilized approximately $2.0 billion of commercial paper borrowings, together with cash on hand, to fund the GMS acquisition. These borrowings were subsequently repaid with the $2.0 billion of proceeds from our September 2025 senior notes issuance. We also utilized commercial paper borrowings in fiscal 2025 to support general liquidity, including the repayment of senior note maturities.
AddedMD&A
We also issue senior notes from time to time. As discussed above, in September 2025, we issued $2.0 billion of senior notes, which were used to repay commercial paper borrowings used to fund the GMS acquisition. Separately, during fiscal 2025, we repaid an aggregate of $4.25 billion of senior notes at maturity.
RemovedMD&A
RemovedMD&A
RemovedMD&A
RemovedMD&A
RemovedMD&A
RemovedMD&A
RewordedMD&A
Changes in working capital were primarily driven by more normalized inventory levels during fiscal 2024 compared to strategic reductions in inventory during fiscal 2023 within our Primary segment, partially offset by the timing of vendor payments and increased inventories during fiscal 2025, along with the deferral of our fourth quarter fiscal 2024 estimated federal tax payment to the first quarter of fiscal 2025 under automatic income 2025, resulting in fewer estimated tax relief provided by the IRS for taxpayers located payments in certain southeastern states. fiscal 2024 compared to fiscal 2025.
RewordedMD&A
In May 2024, July 2025, in connection with the increase in the commercial paper program, we also entered into three additional a new three-year $3.0 billion back-up credit facilities that consisted of a 364-day $3.5 billion credit facility scheduled to expire in May 2025, July 2028, and a three-year new 364-day $1.0 billion back-up credit facility scheduled to expire in May 2027, July 2026, as well as amended and a restated our existing 364-day $10.0 $3.5 billion credit facility scheduled to expire in extend the maturity from May 2025. 2026 to July 2026.
RewordedMD&A
As a percent of net sales, depreciation and amortization was 2.0% in fiscal 2025 compared to 1.9% in fiscal 2024 compared to 1.8% in fiscal 2023, 2024, which primarily reflecting reflects increased intangible asset amortization expense resulting from our acquisitions of $239 million, of which $218 million was related to SRS, as well as increased depreciation expense from ongoing investments in the business. SRS and GMS.
RewordedMD&A
RewordedMD&A
During fiscal 2024, 2025, we generated $19.8 $16.3 billion of cash flow from operations, received approximately $10.0 $4.1 billion of proceeds from commercial paper borrowings, net of repayments, and received $2.2 billion of proceeds from the issuance of long-term debt, net of discounts, and received $316 million of proceeds from commercial paper borrowings, net of repayments. discounts.
RewordedMD&A
RewordedMD&A
As a percent percentage of net sales, interest and other, net, was 1.4% in fiscal 2025 compared to 1.3% in fiscal 2024 compared to 1.2% in fiscal 2023, 2024, primarily due to higher average long-term debt balances and lower interest expense driven by higher long-term debt. income in fiscal 2025.
RewordedMD&A
RewordedMD&A
RewordedMD&A
For fiscal 2024, 2025, our Power Storage & Organization, Electrical, Bath, Plumbing, Indoor Garden, Outdoor Garden, Kitchen & Blinds, Hardware, Power, Building Materials, and Building Materials Appliances merchandising departments within our Primary segment posted positive comparable sales compared to fiscal 2023. 2024.
RewordedMD&A
Total comparable sales decreased 1.8% increased 0.3% in fiscal 2024, 2025, primarily reflecting a 1.4% increase in comparable average ticket, partially offset by a 1.0% decrease in comparable customer transactions and a 0.9% decrease in comparable average ticket compared to fiscal 2023. 2024.
RewordedMD&A
At February 2, 2025, we had outstanding borrowings under our commercial paper program of $316 million with a weighted-average interest rate of 4.4%, 1, 2026, we had no outstanding borrowings under our back-up credit facilities, and we were in compliance with all of the covenants contained in our back-up credit facilities, none of which are expected to impact our liquidity or capital resources.
Quiet changesMD&A
Comparable sales includes sales at all locations, physical and online, open greater than 52 weeks (including remodels and relocations) and excludes closed stores.
Quiet changesMD&A