The Sellers Without a StoreNarrow moat

Home Depot (HD) — moat facet

Online sellers win the light, standard item on price, and Home Depot fills half its own online orders from stores they cannot match.

The competitors Home Depot names most carefully are the ones with no store at all. The 10-K lists retailers operating reseller marketplaces and says its rivals range from traditional brick-and-mortar, to multichannel, to exclusively online1, including specialty and mass digital retailers2.

Online and fulfilment (%)16.6%Online share of Q2 FY2026 sales11.0%Online sales growth, Q2 FY2026about 50%US online orders filledby a store, FY2025Home Depot Form 10-K fiscal 2025 and Q2 fiscal 2026 Form 10-Q
Half the online orders leave from a store.

They compete where comparison is easy. A drill, a bag of fasteners or a smart thermostat can be priced across every seller in seconds, and the 10-K warns that AI tools increase the level of competition by making that comparison easier3.

Home Depot's answer is the store as a depot. Approximately 50% of its American online orders in fiscal 2025 were fulfilled through a store4, and online sales were 16.6% of net sales in the second quarter of fiscal 2026, growing 11.0%5. A heavy, bulky or urgent order is cheaper to fill from a shelf a few miles away than from a distant warehouse.

The online rival wins the small, light, standard item. Home Depot wins the job: lumber, drywall, appliances and the dozen things a contractor needs by seven in the morning.

Delivery is where the contest is decided. The 10-K says customers are seeking faster or guaranteed delivery times, real-time updates, low-price or free shipping and convenient pickup options6. Home Depot can offer pickup within minutes of most customers, which a seller without stores cannot.

This is a narrow contest that Home Depot is holding. The share of online orders fulfilled through a store is the measure; if it falls while online sales grow, the online business is being built like a pure e-commerce operation and loses the advantage the stores give it.

Moat trajectory: Holding steady

Online sales +11.0% in Q2 fiscal 2026; about half filled from stores.

The number that tests this moat
Reported
Share of US online orders fulfilled through a store, latest year
About 50% (fiscal 2025)

The store-as-depot advantage over sellers without stores; a falling share would mean the edge is being given up.

Source: Home Depot Form 10-K, fiscal 2025 ↗
References
  1. ReportedThe 10-K lists retailers operating reseller marketplaces and says its rivals range from traditional brick-and-mortar, to multichannel, to exclusively online, including specialty and mass digital retailers.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - Item 1 business: competition, online and the interconnected experience. — Fiscal 2025 · publ. 18 March 2026 · source ↗
  2. ReportedThe 10-K lists retailers operating reseller marketplaces and says its rivals range from traditional brick-and-mortar, to multichannel, to exclusively online, including specialty and mass digital retailers.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - Item 1 business: competition, online and the interconnected experience. — Fiscal 2025 · publ. 18 March 2026 · source ↗
  3. ReportedA drill, a bag of fasteners or a smart thermostat can be priced across every seller in seconds, and the 10-K warns that AI tools increase the level of competition by making that comparison easier.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - Item 1 business: competition, online and the interconnected experience. — Fiscal 2025 · publ. 18 March 2026 · source ↗
  4. ReportedApproximately 50% of its American online orders in fiscal 2025 were fulfilled through a store, and online sales were 16.6% of net sales in the second quarter of fiscal 2026, growing 11.0%.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - Item 1 business: competition, online and the interconnected experience. — Fiscal 2025 · publ. 18 March 2026 · source ↗
  5. ReportedApproximately 50% of its American online orders in fiscal 2025 were fulfilled through a store, and online sales were 16.6% of net sales in the second quarter of fiscal 2026, growing 11.0%.
    The Home Depot Form 10-Q for the quarter ended 2 August 2026 - segment results, product lines, online sales, IEEPA tariff refunds, the Mingledorff's acquisition and trailing ROIC of 24.8%. — Q2 fiscal 2026 · publ. 25 August 2026 · source ↗
  6. ReportedThe 10-K says customers are seeking faster or guaranteed delivery times, real-time updates, low-price or free shipping and convenient pickup options.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - Item 1 business and Item 2 properties: stores, Pros, SRS, competition and supply chain. — Fiscal 2025 · publ. 18 March 2026 · source ↗
Sources
Generated September 26, 2026