More Than 500 Distribution CentresNarrow moat

Home Depot (HD) — moat facet

Over half of Home Depot's deliveries of stocked products now arrive the same day or the next, from a network of more than 500 leased depots.

Behind the stores sits a second network that took a decade to build. Home Depot operated over 500 distribution and fulfillment centers and warehouses at the end of fiscal 2025, with 104.7 million square feet of space, 97% of it leased1. The stores are owned and permanent; the depots are rented and can be moved as the business changes.

Merchandise inventories at year end ($M)23,451FY202425,817FY202526,847Q2 FY2026Home Depot Form 10-K fiscal 2025; Q2 fiscal 2026 results release
More stock behind faster delivery.

The network exists to make speed cheap. The company says that over half of its deliveries on products it stocks are now same day or next day2, and in many markets it offers same day or next day delivery through stores and fulfillment centers3. A local rival can match that for a few thousand items; matching it for tens of thousands across the country takes both the depots and the stores feeding them.

The Pro business depends on it. Contractors lose money when material arrives late, and the annual report lists enhanced delivery among the six capabilities larger Pros expect4. The SRS acquisition added a 4,000-plus truck fleet and jobsite delivery5.

The cost shows up in inventory. Merchandise inventories were $25,817 million at the end of fiscal 2025, against $23,451 million a year earlier6, and $26,847 million at 2 August 20267; inventory turnover slowed to 4.4 times from 4.78.

The network also serves the Pro directly. The 10-K says SRS branch locations throughout the U.S. and Canada enable deliveries direct to customer job sites on their preferred timelines9, and Home Depot operates market delivery hubs to consolidate freight for the final mile, with a focus on appliances10. The same trucks and depots now serve two different kinds of customer.

The supply chain is a narrow advantage that is still widening. The figure that shows whether it pays is inventory turnover: a further slide below 4.4 times would say the network is holding more stock to deliver faster, which a competitor could match by spending the same money.

Moat trajectory: Widening

Over half of stocked deliveries same or next day; SRS added 4,000-plus trucks.

The number that tests this moat
Reported
Merchandise inventories, latest quarter
$26,847M (2 August 2026) against $25,817M at 1 February 2026

Stock held to deliver fast; inventory rising faster than sales would mean speed is being bought, not earned.

Source: Home Depot Q2 fiscal 2026 results release ↗
⚠ Threats to the moat
⚠ THREAT 01
Inventory Turning Slower
Home Depot's inventory turnover slipped from 4.7 to 4.4 times in a year, the price of stocking deeper to deliver faster.
References
  1. ReportedHome Depot operated over 500 distribution and fulfillment centers and warehouses at the end of fiscal 2025, with 104.7 million square feet of space, 97% of it leased.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - Item 1 business and Item 2 properties: stores, real estate, supply chain and workforce. — Fiscal 2025 · publ. 18 March 2026 · source ↗
  2. ReportedThe company says that over half of its deliveries on products it stocks are now same day or next day, and in many markets it offers same day or next day delivery through stores and fulfillment centers.
    The Home Depot fiscal 2025 annual report to shareholders - the letter's Pro strategy, the six capabilities larger Pros expect, and same-day or next-day delivery. — Fiscal 2025 · publ. April 2026 · source ↗
  3. ReportedThe company says that over half of its deliveries on products it stocks are now same day or next day, and in many markets it offers same day or next day delivery through stores and fulfillment centers.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - Item 1 business and Item 2 properties: stores, real estate, supply chain and workforce. — Fiscal 2025 · publ. 18 March 2026 · source ↗
  4. ReportedContractors lose money when material arrives late, and the annual report lists enhanced delivery among the six capabilities larger Pros expect.
    The Home Depot fiscal 2025 annual report to shareholders - the letter's Pro strategy, the six capabilities larger Pros expect, and same-day or next-day delivery. — Fiscal 2025 · publ. April 2026 · source ↗
  5. ReportedThe SRS acquisition added a 4,000-plus truck fleet and jobsite delivery.
    The Home Depot release announcing the SRS Distribution agreement, Form 8-K exhibit 99.1 - enterprise value of about $18.25 billion, 760-plus branches, 2,500-plus sales force, 4,000-plus trucks. — March 2024 · publ. 28 March 2024 · source ↗
  6. ReportedMerchandise inventories were $25,817 million at the end of fiscal 2025, against $23,451 million a year earlier, and $26,847 million at 2 August 2026; inventory turnover slowed to 4.4 times from 4.7.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - Item 1A risk factors and Item 7A market risk: housing, interest rates, commodities and shrink. — Fiscal 2025 · publ. 18 March 2026 · source ↗
  7. ReportedMerchandise inventories were $25,817 million at the end of fiscal 2025, against $23,451 million a year earlier, and $26,847 million at 2 August 2026; inventory turnover slowed to 4.4 times from 4.7.
    The Home Depot second-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - sales, comparable sales, transactions, ticket, earnings, reaffirmed guidance and the balance sheet. — Q2 fiscal 2026 · publ. 18 August 2026 · source ↗
  8. ReportedMerchandise inventories were $25,817 million at the end of fiscal 2025, against $23,451 million a year earlier, and $26,847 million at 2 August 2026; inventory turnover slowed to 4.4 times from 4.7.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - Item 1A risk factors and Item 7A market risk: housing, interest rates, commodities and shrink. — Fiscal 2025 · publ. 18 March 2026 · source ↗
  9. ReportedThe 10-K says SRS branch locations throughout the U.S. and Canada enable deliveries direct to customer job sites on their preferred timelines, and Home Depot operates market delivery hubs to consolidate freight for the final mile, with a focus on appliances.
    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 ↗
  10. ReportedThe 10-K says SRS branch locations throughout the U.S. and Canada enable deliveries direct to customer job sites on their preferred timelines, and Home Depot operates market delivery hubs to consolidate freight for the final mile, with a focus on appliances.
    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