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Now let me turn the call over to Ted.

Ted Decker -- Chairman, President, and Chief Executive Officer

Thank you, Isabel, and good morning, everyone. Sales for fiscal 2024 were $159.5 billion, an increase of 4.5% from the same period last year. Comp sales declined 1.8% from the same period last year, and our U.S. stores had negative comps of 1.8%.

Adjusted diluted earnings per share were $15.24, compared to $15.25 in the prior year. In the fourth quarter, comp sales increased 0.8% from last year, and comps in our U.S. stores were up 1.3%. Adjusted diluted earnings per share were $3.13, compared to $2.86 in the prior year.

In the quarter, we saw broad-based engagement across our geographies as 15 of our 19 U.S. regions delivered positive comps. In addition, both Canada and Mexico reported positive comps in local currency. Our fourth quarter results exceeded our expectations as we saw greater engagement in home improvement spend despite ongoing pressure on large remodeling projects.

Throughout the year, we remain steadfast in our investments across our strategic initiatives despite uncertain macroeconomic conditions in a higher interest rate environment that impacted home improvement demand. Our strategic priorities remain creating the best interconnected shopping experience, growing our Pro wallet share through a unique ecosystem of capabilities, and building new stores. We are always improving our interconnected shopping experience. We know that our customers want faster delivery than ever before.

Recall that last quarter, I shared the progress we made with our investments in our downstream supply chain, including an expanded assortment in our DFCs to allow for faster delivery speeds across more products. We also began leveraging our stores to offer more delivery options. Our delivery speeds are now the fastest they've ever been, and customers are increasing their spend. Billy will take you through these results in a moment.

Growing our share of wallet with our Pro customers is a key part of our growth strategy. We've continued investing in our store experience, fulfillment options, and sales teams. These investments are delivering incremental sales growth, and Ann will discuss this in detail shortly. In June, we completed the acquisition of SRS.

And while we've only owned them for seven months, we could not be happier with the business. The capabilities that SRS brings are both additive and complementary to our strategic efforts. As expected for fiscal 2024, SRS contributed $6.4 billion in sales for the seven months we owned them. And since we acquired them in June, they have opened over 20 greenfield locations and completed four tuck-in acquisitions.

We're also focusing on many cross-sell opportunities with SRS. As an example, we've talked about the opportunity QuoteCenter, our platform that provides real-time quote pricing and different fulfillment options for larger job lot quantities. SRS was already in QuoteCenter but not in all markets. Today, they are in nearly every market with their roofing products.

And since making this change, we have seen SRS' sales in QuoteCenter more than triple. Going forward, we will continue to support SRS' momentum, and we expect their organic sales to grow mid-single digits in fiscal 2025. Our real estate footprint remains one of our distinct competitive advantages. We are expanding that footprint by investing in new stores in areas that have experienced population growth or where it makes sense to relieve pressure on existing high-volume stores.

In fiscal 2024, we opened 12 new stores: 10 in the U.S. and two in Mexico. We are seeing great results from these stores which are outperforming our expectations. For fiscal 2025, we plan to open 13 new stores.

For fiscal 2025, we expect total sales growth of approximately 2.8%, comparable sales growth of approximately 1%, and adjusted diluted earnings per share to decline approximately 2%. We remain excited about all our growth opportunities, and we feel confident that the investments we are making will set us up for continued success. I want to close by thanking our associates for their hard work and dedication to our customers in the fourth quarter and throughout the year. Our results reflect strong execution by our stores, merchants, and supply chain teams, as well as our vendor partners, as they remain focused on delivering value and service to our customers.

With that, let me turn the call over to Ann.

Ann-Marie Campbell -- Senior Executive Vice President

Thanks, Ted, and good morning, everyone. Our thoughts continue to be with everyone impacted by Hurricanes Helene and Milton, as well as the devastating fires in Los Angeles. We are here as these communities rebuild with our associates and suppliers who consistently go above and beyond to serve our customers, and I want to thank them for all that they do. As you heard from Ted, growing our share of wallet with the Pro is a key part of our growth strategy, and I'd like to take a moment to talk more about the progress we've made.

For the quarter, all our Pro cohorts positive comped, and it is clear that our initiatives are working. Over the last few years, we've made investments in our stores, as well as through our Pro ecosystem, to improve the shopping experience for all of our Pros, regardless of their purchase occasion, whether they are shopping in store, online, or getting delivery from stores or distribution centers. We know that nearly all Pros shop our stores. Over the years, we have been investing across our stores to simplify and enhance the in-store shopping experience through investments in our freight flow process and technology to increase on-shelf availability; investments in inventory to provide a deeper assortment and job lot quantities in core SKUs; enhancements in our labor model; and the introduction of CXMs, or dedicated customer experience managers; and the development of selling tools to provide better insights for our associates to help serve the Pro.

In addition to these in-store investments, our investments in the FDC network have improved the in-store experience by taking many deliveries out of the store which reduces clutter in the aisles from staged orders. As a result, our in stock have improved, and our associate availability is higher. The FDC has also enabled faster delivery, expanded fulfillment options, and more consistent on-time and complete delivery of larger orders directly to the job site. We also continue to build out a more comprehensive set of capabilities in our Pro ecosystem.

These capabilities include a broader and deeper assortment of products in the FDC; dedicated sales teams that provide a higher level of service; enhanced selling tools with CRM capabilities to better serve our customers; additional digital capabilities through a B2B website, loyalty, and preferred pricing programs. It is all of these capabilities, as well as the enhancement in store, that have really allowed us to win a greater share of wallet with all our Pros. Our initiatives are resonating with Pros. And not only are we gaining traction with the larger pros that works on complex projects, we are also seeing meaningful lift in sales with all Pros across all purchase occasions.

In fact, these investments have driven over $1 billion in incremental sales on an annualized basis in 17 markets. Even in these 17 markets, we are in different stages of maturity, and there is still a lot to do to better serve all our Pros from improving our delivery experience to building new capabilities like trade credit and order management to leveraging SRS and improving connectivity with our stores. We know that as we invest across all of our assets, it will allow us to more uniquely serve the Pro. We have a lot to be proud of this year.

We continue to focus on delivering the best customer experience in home improvement. We have seen great associate engagement and historically high retention rates. Our safety performance was exceptional, and we've made significant progress in shrink, driven by our company-specific initiatives. All of these efforts are positioning us well and will allow us to continue to grow with all of our customers.

Thank you. And with that, let me turn the call over to Billy.

Billy Bastek -- Executive Vice President, Merchandising

Thank you, Ann, and good morning, everyone. I want to start by also thanking all of our associates and supplier partners for their ongoing commitment to serving our customers and communities. As you heard from Ted, our performance during the fourth quarter exceeded our expectations as we saw broader engagement across home improvement-related projects. In addition, we also saw incremental sales as a result of the ongoing hurricane recovery efforts.

However, the higher interest rate environment continues to pressure larger remodeling projects. Now turning to our merchandising department comp performance for the fourth quarter, 10 of our 16 departments posted positive comps, including appliances, indoor garden, lumber, power, building materials, paint, outdoor garden, storage, hardware, and plumbing. During the fourth quarter, our comp transactions increased 0.6%, and comp average ticket increased 2.2%. Inflation from core commodity categories positively impacted our average ticket by approximately 20 basis points, driven by inflation in lumber and copper wire.

Additionally, during the quarter, we continued to see our customers trading up for new and innovative products. Big ticket comp transactions or those over $1,000 were up 0.9% compared to the fourth quarter of last year. We were pleased with the performance we saw in categories such as appliances, building materials, and lumber. However, we continued to see softer engagement and larger discretionary projects for customers typically use financing to fund the project, such as kitchen and bath remodels.

During the fourth quarter, both Pro and DIY comp sales were positive with Pro outpacing the DIY customer. In the fourth quarter, we saw strength across many Pro heavy categories like gypsum, decking, concrete, and fencing. Turning to total company online sales, excluding the impact of the extra week in the quarter, sales leveraging our digital platforms increased approximately 9% compared to the fourth quarter of last year. There are a lot of drivers to our online success from the focus on continuously improving the shopping and browsing experience to enhancing the delivery and post-delivery experience to leveraging AI to enhance our chat features, product descriptions, and creating rating summaries for our customers.

This quarter, I'd like to talk more specifically about delivery. As you heard from Ted, we remain focused on continuing to improve our interconnected retail experience and have made significant progress on the delivery experience for our customers. We have invested in a broader assortment across our 19 DFCs, established partnerships with third-party last mile providers, and made technology improvements across our 2,000-plus stores to better utilize all of our assets for the benefit of our customers. Today, we have the fastest delivery speeds across the greatest number of products in company history.

Our customers also have more fulfillment options than ever before. They can choose what they want, when they want, including same-day and next-day delivery. We know that driving a superior customer experience, including speed of delivery, drives greater customer satisfaction, higher engagement, higher conversion, and ultimately, more sales. We've seen these customers who are engaging in our delivery capabilities meaningfully increase their overall spend with us across all purchase occasions and channels.

During the fourth quarter, we hosted our appliance, gift center, decorative holiday, and Black Friday events. We saw strong engagements across all of these events with our appliance and gift center events posting record sales years. We're looking forward to the year ahead, particularly with the spring selling season right around the corner, and we have a great lineup of new and innovative products from live goods to outdoor power equipment. We continue to see an industrywide shift from gas-powered to battery-powered tools, and we have been leaning into this trend for some time.

We have the brands that matter most to our customers, including Ryobi, Milwaukee, DeWalt, and Makita. In our Spring Gift Center event, we will provide our largest assortment of battery-powered products with longer run times and enhanced performance across a number of battery platforms, including Ryobi ONE, Milwaukee M18 Forge, DeWalt XR POWERPACK and POWERSTACK, and Makita LXT, to name a few. We're also excited about our Live Goods Program. Each year, our merchants partner with a wide network of regional and local growers to ensure that our customers have new and improved varieties and the right localized assortments to enhance the overall garden experience.

Investing in our relationships with our growers will allow us to continue to drive innovation to meet our customers' needs and improve their shopping experience while building loyalty to The Home Depot. As we look forward to spring, we are excited about continuing to provide a broad assortment of best-in-class products that are in stock and available for our customers when and how they need it. With that, I'd like to turn the call over to Richard.

Richard McPhail -- Executive Vice President, Chief Financial Officer

Thank you, Billy, and good morning, everyone. In the fourth quarter, total sales were $39.7 billion, an increase of $4.9 billion or approximately 14% from last year. Fiscal 2024 included a 53rd week which added approximately $2.5 billion in sales for the quarter and the year. During the fourth quarter, our total company comps were positive 0.8% with comps of negative 1.7% in November, positive 6.6% in December, and negative 2% in January.

Comps in the U.S. were positive 1.3% for the quarter with comps of negative 2% in November, positive 8% in December, and negative 1.4% in January. It is important to note that holiday shifts positively impacted December while negatively impacting November and January. Our results for the fourth quarter include a net contribution of approximately $220 million in hurricane-related sales which positively impacted total company comps by approximately 65 basis points for the quarter.

Additionally, foreign exchange rates negatively impacted total company comps by approximately 70 basis points for the quarter. For the year, our sales totaled $159.5 billion, an increase of $6.8 billion or 4.5% versus fiscal 2023. For the year, total company comp sales decreased 1.8%, and U.S. comp sales decreased 1.8%.

In the fourth quarter, our gross margin was approximately 32.8%, a decrease of 25 basis points from the fourth quarter last year, reflecting a change in mix as a result of the SRS acquisition, which was in line with our expectations. For the year, our gross margin was approximately 33.4%, an increase of approximately 5 basis points from last year, which was in line with our expectations. During the fourth quarter, operating expense as a percent of sales increased approximately 30 basis points to 21.5% compared to the fourth quarter of 2023. Our operating expense performance was in line with our expectations.

For the year, operating expenses were approximately 19.9% of sales, representing an increase of 75 basis points from fiscal 2023. Our operating margin for the fourth quarter was 11.3%, compared to 11.9% in the fourth quarter of 2023. Excluding intangible asset amortization in the quarter, our adjusted operating margin for the fourth quarter was 11.7%, compared to 12.1% in the fourth quarter of 2023. Our operating margin for the year was 13.5%, compared to 14.2% in 2023.

Excluding intangible asset amortization, our adjusted operating margin for the year was 13.8%, compared to 14.3% in 2023. Interest and other expense for the fourth quarter increased by $150 million to $608 million due primarily to higher debt balances than a year ago. In the fourth quarter, our effective tax rate was 22.9% and for the year was approximately 23.7%. Our diluted earnings per share for the fourth quarter were $3.02, an increase of approximately 7% compared to the fourth quarter of 2023.

Diluted earnings per share for fiscal 2024 were $14.91, a decrease of 1.3% compared to fiscal 2023. Excluding intangible asset amortization, our adjusted diluted earnings per share for the fourth quarter were $3.13, an increase of approximately 9.4% compared to the fourth quarter of 2023. Adjusted diluted earnings per share for fiscal 2024 were $15.24, essentially flat compared to fiscal 2023. During the year, we opened 12 new stores, bringing our store count to 2,347 at the end of fiscal 2024.

Retail selling square footage was approximately 243,000,000 square feet, and total sales per retail square foot were approximately $600 in fiscal 2024. At the end of the quarter, merchandise inventories were $23.5 billion, up approximately $2.5 billion versus last year, and inventory turns were 4.7 times, up from 4.3 times last year. Turning to capital allocation. During the fourth quarter, we invested approximately $1.1 billion back into our business in the form of capital expenditures.

This brings total capital expenditures for fiscal 2024 to approximately $3.5 billion. And during the year, we paid approximately $8.9 billion in dividends to our shareholders. Today, we announced our board of directors increased our quarterly dividend by 2.2% to $2.30 per share, which equates to an annual dividend of $9.20 per share. And finally, during fiscal 2024, we returned approximately $600 million to our shareholders in the form of share repurchases.

Computed on the average of beginning and ending long-term debt and equity for the trailing 12 months, return on invested capital was approximately 31.3%, down from 36.7% in the fourth quarter of fiscal 2023. Now I'll comment on our outlook for 2025. As you heard from Ted, we feel great about the investments we made in 2024, the progress we've made throughout the year, and the significant opportunities we have as we look ahead. And while there are signs that the home improvement market is on the way toward normalization, uncertainty still remains.

As we look ahead to fiscal 2025, we expect the underlying momentum in the business that we saw in the back half of 2024 to continue into 2025. However, we are not assuming any meaningful changes to the macroeconomic environment. We expect our consumer will remain healthy. We are not assuming a change in the rate environment nor improvements in housing turnover.

As a result, we would expect continued pressure on larger remodeling projects. Given these factors, our fiscal 2025 outlook is for total sales growth to outpace sales comp with sales growth of approximately positive 2.8% and comp sales growth of approximately positive 1% compared to fiscal 2024. Total sales growth will benefit from the SRS acquisition, the new stores we opened in fiscal 2024 and plan to open in fiscal 2025. And for the year, we expect SRS to deliver mid-single-digit organic growth.

Our gross margin is expected to be approximately 33.4%, essentially flat compared to fiscal 2024. Further, we expect operating margin of approximately 13% and adjusted operating margin of approximately 13.4%. This primarily reflects natural deleverage from sales and continued investments across the business, as well as reflecting the mixed impact from the SRS acquisition. Our effective tax rate is targeted at approximately 24.5%.

We expect net interest expense of approximately $2.2 billion. We expect our diluted earnings per share to decline approximately 3% compared to fiscal 2024 when comparing the 52 weeks in fiscal 2025 to the 53 weeks in fiscal 2024, and we expect our adjusted diluted earnings per share to decline approximately 2% compared to fiscal 2024. On a 52-week basis, it would be essentially flat compared to fiscal 2024. We plan to continue investing in our business with capital expenditures of approximately 2.5% of sales for fiscal 2025.

We believe that we will grow market share in any environment by strengthening our competitive position with our customers and delivering the best customer experience in home improvement. Before opening the call for questions, we are pleased to announce that we will be holding an investor conference on December 9th, 2025, in New York City. We will share more details in the future, but for now, please hold the date. Thank you for your participation in today's call.

And Christine, we are now ready for questions.

Questions & Answers:

Operator

Thank you. [Operator instructions] Thank you. Our first question comes from the line of Laura Ng with Morgan Stanley. Please proceed with your question.

Simeon Gutman -- Analyst

Good morning. It's Simeon Gutman from Morgan Stanley. My first question is on the macro housing backdrop and the ingredients to a 1% comp. So existing home sales look like they're set to grow mid singles.

And if that's the case, home improvement demand could arguably be a little stronger than maybe a 1% comp or whatever assumption you're using. What's your take on that? I know Richard said we're not assuming any improvement in turnover. Is there anything change about -- any change about your forecast due to people staying in their homes longer and rates being stubborn?

Ted Decker -- Chairman, President, and Chief Executive Officer

Hi, Simeon. Yes. At this point, while we've seen a little life in turnover in Q4, we're not expecting meaningful increase off that 40-year low. We've likely reached the bottom of housing turnover at about 3% of units, but we're not expecting a big rebound nor significant increases in new housing starts.

However, if you just step back, I mean, if you look at our customer, they remain very healthy. We look at our customer today, we think about $110,000 average income. Those incomes have been growing. We've talked about the increase in home equity values, up 50% since the end of '19, and then wealth effect through the stock market and other investments.

So our customer is very healthy. And as you say, if they're staying in their homes longer, they will take on larger remodeling projects as opposed to moving, those that are locked into lower interest rates or just not wanting to get mortgages with the higher rates. But we're not anticipating a large decrease in mortgage rates. It will be more an issue of consumers getting used to these higher rates.

And to take on a larger project, it's usually financed, and that financing is through HELOCs. And we've started to see a little increase in each of cash-out refis, as well as draws on HELOCs, but there's literally trillions of dollars of equity built up in the U.S. housing. And as homes continue to age and people are staying in those homes and realize that we're highly unlikely to see the low interest rates we saw over the past two, three years that they'll eventually tap that equity and do the larger remodeling projects.

We're just not sure that turn comes in 2025 at a dramatically accelerated pace.

Richard McPhail -- Executive Vice President, Chief Financial Officer

And to follow up on the 1%, just to explain that, Simeon. Obviously, this is a triangulation. We look at exit run rates of the business. And as we said, keep in mind that Q4, while certainly showing signs of momentum growing from Q3, still had some benefits from hurricanes that won't fully repeat in 2025, so a slight dampening of the run rate and then the assumption of continued pressure on larger projects.

With the shape of the year increasing slightly through the year, which also includes the inclusion of SRS in our comp, you'll see them in our comp for the last seven months of the year.

Simeon Gutman -- Analyst

OK. That's helpful. The follow-up. If comps do end up being a little stronger than 1%, does each point flow through at this 10 points of leverage to the margin? Is -- or is there a scenario, whether it's better DIY, more Pro, more complex project? Or do you spend more? Is there a mix shift that could alter that relationship above 1%?

Richard McPhail -- Executive Vice President, Chief Financial Officer

No. I think, look, the 10 basis points is a good rough estimate of leverage from that point.

Simeon Gutman -- Analyst

Great. Good luck.

Richard McPhail -- Executive Vice President, Chief Financial Officer

You're not going to have meaningful shifts in mix. Even if mix shifts, you're not going to have meaningful differences in that leverage number.

Simeon Gutman -- Analyst

Thank you.

Operator

Our next question comes from the line of Christopher Horvers with J.P. Morgan. Please proceed with your question.

Christopher Horvers -- Analyst

Thanks. Good morning, everybody. I wanted to go at a similar kind of question maybe on a different angle. Appliances were up.

Paint was up. Was that volume driven? And to what extent do you think the category was up versus Home Depot continuing to gain share? Because as you look forward, the replacement cycle dynamics should get better from 4Q levels. You'll be five years out. Ted, you've talked about in the past, every wall was painted in the U.S.

in 2020, but we're getting further from there. So doesn't that replacement part of the business further accelerate? And curious if you're going to say like, well, X percent of the business is replacement versus Y percent is more like big ticket remodel, which would we expect to continue to be an anchor.

Ted Decker -- Chairman, President, and Chief Executive Officer

Sure, Chris. Let me make a broad comment, and Billy can give some detail on particular categories. Look if we just step back and look at this quarter, we're happy with it, right? Sales exceeded our expectations, and we're happy with positive comps, obviously, for the first time in two years and particularly happy with positive transaction comps which has been negative for over three years. And as you say, the business has strengthened across many categories in many geographies.

In fact, we haven't seen this broader-based performance in over two years and maybe even closer to three years. And if you go back, Chris, to your comment on COVID, I'd say that shift of spending back to services post-COVID and the pull forward of demand during the pandemic, those have largely played out. There may be a category here and there, but I'd say that PCE shift in home improvement pull forward have largely played out. And engagement in repair and smaller updates and decor-oriented updates is strengthening, and Billy can give some detail on the categories.

Billy Bastek -- Executive Vice President, Merchandising

Yeah. Listen, as Ted mentioned, the broader-based performance, I talked about the 10 of the 16 departments that posted positive comps, we had an outperformed, Chris, as you mentioned, in appliances and our gift center business, which we had record sales, candidly, in that -- in those areas across the store. So we had a healthy balance of transactions and unit performance, which, to Ted's point, we hadn't seen in a while. With that said, still the pressure we know in finance projects.

We had great performance across many of our Pro-heavy categories. I mentioned gypsum and decking, concrete fencing. And while there was some hurricane impact in there, we're pretty pleased with the broad base of performance, not only across the merchandising departments, but certainly across the country. But there's just no denying the deferral that we're still seeing.

We are pleased with the pull forward that we think is largely behind us at this point from a go-forward standpoint, so all those things bode well. But still the pressure in some of the -- more finance projects, we're still continuing to see that exist.

Christopher Horvers -- Analyst

Got it. And then, Richard, can you talk about the monthly U.S. comps adjusting for the for the holiday shift? There's been a lot of questions, I think, over the past five, six weeks on what's going on with the consumer. You saw F&D talk about a slowdown relative to what they saw in the fourth quarter, and they talked about weather.

So can you talk about do you think that the weather had any influence on the business in January and any comment on exit rate? Thanks very much.

Richard McPhail -- Executive Vice President, Chief Financial Officer

I think that -- so the monthly progression was absolutely influenced by holiday shifts, again, to the benefit of December, to the detriment of November and January. But no doubt, weather was horrible in January. We've had two years in a row of tough January, but this one was particularly tough. And so that's why we don't read a tremendous amount into it when we think about exit run rate.

But no doubt, weather had an impact.

Christopher Horvers -- Analyst

Great. Thanks very much. Have a great spring.

Richard McPhail -- Executive Vice President, Chief Financial Officer

Thanks.

Operator

Our next question comes from the line of Michael Lasser with UBS. Please proceed with your question.

Michael Lasser -- Analyst

Good morning. Thank you so much for taking my question. What market share assumption have you embedded into your 2025 outlook? And why wouldn't it be reasonable for us to assume that Home Depot's market share gains should accelerate from here and be above where they've been historically in light of you now having SRS, as well as many more capabilities, given the investments that have been made over the last several years? Is that a sign that you think your DIY market share is starting to peak, and that could have an impact on the overall share gains for the enterprise?

Ted Decker -- Chairman, President, and Chief Executive Officer

Hi, Michael. Thanks for the question. As we look at the overall market for 2025, we see it overall being flat, maybe up slightly. Those expectations have come down over the last several months.

And our plus 1%, as Richard explained, is a continuation of some of the underlying strength in the business and our initiatives that we absolutely are gaining incremental sales for us. So that's why we peg our comp growth at 1%. Now if you look at the combination of what's driving our share gains for both Pro and consumer in the core, it is all the capabilities that we're putting in the marketplace. And we talked a lot about interconnected and all the investments we've made on the interconnected journey and then certainly all the investments on our Pro ecosystem, and I'll have Jordan spend a few minutes more on what we're doing on interconnected.

And then you add what we're doing with SRS. SRS will grow faster than the core, and we believe they're taking share in each of their three verticals. So we're very pleased with what SRS is doing. So all that with our new stores, which are starting to add some meaningful dollars to our growth, gets us to the 1% comp and 2.8% overall growth in a flat market.

So we wouldn't say our share has peaked by any means in DIY or Pro. And then Jordan, if you chat about what we're doing to drive share in Pro and consumer with interconnected.

Jordan Broggi -- Executive Vice President, Customer Experience and President, Online

Yeah. Sure. So I mean, we -- Billy shared the excitement we have had at – on dot-com sales performance, and that's really across both the consumer and the Pro, both of them up healthily online. And it's been a combination of investments that we've made that have helped deliver that from the site experience and really making that journey so much better from a browse-and-search perspective and finding the right product to the fulfillment.

Billy mentioned that we've had the fastest delivery speeds in the history of our company. Same-day delivery, next-day delivery, whether that's concrete and lumber or whether that's a light bulb or power tool, it's been really fast. And all of those investments have come together to really drive an improvement in conversion rate on the site, and then what we see is an increased engagement across channel with more purchases that come in store. So we're really excited about the momentum there and see the investments that we've made really paying off.

Michael Lasser -- Analyst

Thank you for that. My follow-up question is on what's been happening as of late. There's been a lot of focus on the impact that the government efficiency measures and/or immigration policy implementation could have on the U.S. consumer.

How did you factor that and those considerations into the guidance? And while you had just indicated that weather was really the underlying cause of some of the results in January, are you seeing any evidence that these factors are having an impact on the business? There's been talk about housing inventory in the Mid-Atlantic starting to creep higher. So anything you can provide that would be very helpful.

Ted Decker -- Chairman, President, and Chief Executive Officer

Michael, I don't think we've seen anything specifically. If you tick through some of the things you mentioned and some I'd add, tax policy would be one of the most important to Home Depot is a full taxpayer. So we'd be very pleased that the corporate rate stays at 21%. Tariffs is -- obviously a lot of discussion on what rates would be and what countries would be impacted and what categories of goods.

We've been through that before, and I think we have the best team to manage through any tariff environment which would impact the industry broadly. I'd say our diversification efforts out of certain concentrations and countries has been quite good over the last six or seven years. You mentioned immigration. We've talked about having a shortage of skilled trades folks in this country for some time.

We believe it's like 400-odd-thousand trades folks short and not sure how that number would change with any meaningful change in immigration. And then specifically, to the government efficiency in Mid-Atlantic, no, we've not seen anything there.

Michael Lasser -- Analyst

Thank you very much, and good luck.

Ted Decker -- Chairman, President, and Chief Executive Officer

Thank you.

Operator

Our next question comes from the line of Scot Ciccarelli with Truist. Please proceed with your question.

Scot Ciccarelli -- Analyst

Good morning, guys. Ann talked about $1 billion of incremental sales in the 17 markets where you start to build out complex Pro capabilities. How do you actually measure that? And then what kind of ramp would you expect in those markets in '25 as you continue to phase in order management, credit expansion, etc., some of the other capabilities that you've discussed? Thanks.

Ann-Marie Campbell -- Senior Executive Vice President

Yeah. Thank you, Scot. Yeah, as we mentioned that we're incredibly pleased with what we've seen so far. We're generating $1 billion and growing, so that's been fantastic.

And as we mentioned as well, it's geared across all purchase occasion. The way we measure that is the incremental sales in the 17 markets versus what we see in the top 40 markets. So the $1 billion of annualized sales is that in those 17 markets, we have been outperforming other top 40 markets. And so when you think about 2025, we're focused on really maturing the capabilities in these 17 markets which is really important, not only maturing the existing capabilities but really, really rolling out new capabilities as well.

So whether it be delivery, expanding our sales force, those are key things that we'll continue to focus on, as well as new capabilities as we talk about trade credit, order management, account management. Those are opportunities that we have to continue to grow in 2025. And Ted talked about SRS. And there's also an opportunity for us to really drive cross-selling opportunities across the SRS portfolio.

Last but not least, we have more FDCs in the pipeline as well. We have our three FDCs under construction. We have more in the pipeline, so we're incredibly pleased with what we've seen in 2024 when we think about the 17 markets across our company and compared to the top 40 markets, but more importantly, what we've seen with the Pro ecosystem across the country as well and making sure that we're doubling down on the opportunities that we see.

Scot Ciccarelli -- Analyst

Appreciate that. What's the biggest sticking point as you roll this out? Is it building the specialty sales force? Is it the recognition from your complex Pros, etc.? Like what's the toughest piece that you've kind of learned that you'd have to -- what's your toughest hurdle you have to clear?

Ann-Marie Campbell -- Senior Executive Vice President

Yeah, Scot. This is what we continue to find. This is an entire ecosystem, right? So it's not just one component of the ecosystem, right? When we talk about the outside sales, or we talk about delivery, or we talk about order management and account management, it's all of those things working in concert. So what is always kind of difficult is, as you roll these capabilities out and there are different levels of maturity, our focus is to refine and really perfect what we're seeing, and that takes time in a market, especially when you're building relationships.

We don't want to create new relationships with our new capabilities with our Pros and then have big failure points. So the difficult part is making sure that we're doubling down and moving at a speed that drives outcome but at the same time as we focus on perfecting within the market. So it's incredibly complex. It is really important that we do this right.

And in 2024, we saw some really, really great progress, and that's what makes us excited about what we will do in 2025 and beyond.

Scot Ciccarelli -- Analyst

Thank you.

Operator

Our next question comes from the line of Karen Short with Melius Research. Please proceed with your question.

Karen Short -- Analyst

Hi. Thanks very much, and good to talk to you. So I had one question regarding guidance and another totally irrelated. So ex the tangibles in terms of operating margin guidance, so should we look at that as the right way to think about the relationship between sales growth and operating margin growth, i.e., excluding intangible impact from SRS on your guidance?

Richard McPhail -- Executive Vice President, Chief Financial Officer

Yes, yes. Karen, we believe that removing the noncash amortization expense related to the amortization of intangible assets is the best way to look at our underlying operating margin, and so that's where we would -- we have guided for the last couple of quarters and will continue to guide on the basis of moving forward.

Karen Short -- Analyst

So how should we --

Richard McPhail -- Executive Vice President, Chief Financial Officer

And Karen, by the way, it includes -- we -- the operating margin is adjusted for all noncash amortization expense at The Home Depot, not just that related to SRS.

Karen Short -- Analyst

OK. Thank you. So how should we think about the relationship on total sales growth versus operating margin -- or operating profit growth on the way you define it?

Richard McPhail -- Executive Vice President, Chief Financial Officer

[Audio gap] delevers is essentially the same when you're looking at adjusted operating margin versus GAAP operating margin, so there's no change needed in the way that we've talked about leverage or deleverage in the past.

Karen Short -- Analyst

OK. And is 2.5% of sales the rate -- run rate to think about on capex going forward?

Richard McPhail -- Executive Vice President, Chief Financial Officer

So historically, we've said 2% is sort of a rough expectation. We have increased that percentage really to reflect two things. Number one, obviously, we are happy with the investments we've made. They are generating exceptional returns, and so we're leaning into those investments.

But second, a big part of that investment portfolio are our new stores. And it's worth calling our new store program out. In 2023, we announced we would build 80 stores over five years, including the year 2023. We are 25 stores into that program.

So far, the results have been fantastic. We're tracking ahead of expectations. So we are going to continue, and we will complete that program. This year will be the third year of the program.

We'll complete it by year five, which is 2027. So that 2.5% of sales is reflective of that new store program, as well as leaning into investments that are working.

Karen Short -- Analyst

OK, great. Thank you so much.

Richard McPhail -- Executive Vice President, Chief Financial Officer

You're welcome.

Operator

Our next question comes from the line of Steven Zaccone with Citi. Please proceed with your question.

Steve Zaccone -- Analyst

Hey, good morning. Thanks very much for taking my question. I actually want to follow up on Karen's question there and maybe dig into the SRS contribution a bit more. Can you help us understand how that's impacting the bottom line for 2025? As you give the organic mid-single-digit growth for the business, maybe how is the bottom line tracking versus expectations?

Richard McPhail -- Executive Vice President, Chief Financial Officer

[Audio gap] dollars to our top line from seven months of ownership. They hit that on the button, and we feel great about their P&L top to bottom. And so from -- as we discussed during the deal, we expected this to be cash accretive within the first year of ownership. We'll be coming up on that first-year anniversary soon.

They already contributed to top and bottom line, and so we feel really happy about that. Now just to be clear, to make sure that everyone understands this, obviously, we report our results on a consolidated basis. If you think about the pro forma impact of SRS, the reflection of SRS, and its mix impact on The Home Depot, there's about a 40-basis-point full-year mix impact to The Home Depot. And so think about Home Depot in total being impacted by that 40 basis points, but that's a mix effect, and we'll take that all day long.

They are leaders in their spaces. They're performing exceptionally well, and we're happy with that.

Steve Zaccone -- Analyst

OK. Thanks. The follow-up question I had was just on maybe the pricing environment. In the past, I think you've talked about prices kind of settling.

Do you feel like we're at a point now where we should see sort of a natural return to a normal environment for pricing? And then how does the potential for tariffs kind of fit into that view?

Billy Bastek -- Executive Vice President, Merchandising

Well, thanks, Steven. It's Billy. Listen, as it relates to just the general pricing environment, and then I'll talk for a minute about tariffs, I mean, we are in a very rational market, just by definition. And prices, as we've mentioned on the last couple of calls, really have settled to your point.

And the promotional activity is the same as it's been kind of pre-COVID as well, so no differences in that. And as I mentioned, again, the last couple of quarters, pricing has settled into the market accordingly. As it relates to tariffs, and we've spoken a little bit about it this morning, I mean, listen, we've been through this before. We'll continue to assess just how these impact our business from a go-forward standpoint.

We've been focused on diversifying sourcing for several years, so we'll continue to assess that going forward. But our No. 1 job in merchandising is to be the customer's advocate for value. We have great, great vendor relationships.

And with our scale, we feel that we're as well or better positioned to -- than anyone in the marketplace to navigate the environment going forward.

Richard McPhail -- Executive Vice President, Chief Financial Officer

And actually, I want to go back one question and just follow up on Steven's question. So Steven, just to put a year-over-year comparison together for you and talk about how SRS impacts year over year from an operating margin perspective. So as you see in our guidance, we're guiding to a 13.4% adjusted operating margin from a 13.8%. That's a 40-basis-point decrease.

Here's how that 40 basis points breaks down. It's coincidental to the pro forma impact, but the year over year is different. So that 40 reflects 20 basis points of natural deleverage. And recall, we think this business levers about a 3% comp.

So at a 1% comp, we're getting about 2 comp points of deleverage, so two times about 10 basis points per is 20 basis points. Then the inclusion of 12 months of ownership of SRS compared to seven months of ownership is reflected in 15 basis points of mix shift. So you've got about a 15-basis-point impact of that year-over-year comparison of 12 months versus seven months. And then finally, the comparison versus a 53-week year also shifts margin by 5 basis points.

So you've got 20 bps from natural deleverage. You've got 15 from SRS impact, and you've got 5 from the 53rd-week comparison. Within that, I think it's worth saying, look, we are leaning into investments. We're paying for those investments through productivity, and so that's also within that operating margin guidance.

There's productivity inside, as well as leaning into investments, and I hope that makes it a little bit more clear.

Steve Zaccone -- Analyst

Yeah. That answers our question. Thank you so much for that follow-up.

Richard McPhail -- Executive Vice President, Chief Financial Officer

You're welcome.

Operator

Our next question comes from the line of Seth Sigman with Barclays. Please proceed with your question.

Seth Sigman -- Analyst

Thanks. Good morning, everyone. I do want to follow up on that last point around the flow through. If you step back and look at your sales over the last several years, I think since 2019, sales were up maybe 45%.

SG&A is actually up a similar percent. Along the way, there have been investments and plenty of cost pressures. I guess the real question is, to the extent that comps start to improve here, they progress throughout 2025, are we at that point where sales should grow faster than expenses, and you can really start to see that flow-through come through?

Richard McPhail -- Executive Vice President, Chief Financial Officer

Seth, I would point you back to our investor conference back in 2023, right? Once this market normalizes, we would expect a base case of 3% to 4% top-line growth. We would expect -- and within that, we expect flat gross margin as kind of a base expectation, and then we do expect operating expense leverage. And so that takes you to the earnings per share expectation of mid- to high single-digit growth once our market has normalized and once we are back to that level of sales growth, and that view hasn't changed since 2023.

Seth Sigman -- Analyst

OK, great. Thank you for that. And then just on that point around the gross margin, you are guiding flat in '25. You still have some SRS dilution wrapping into this year.

Can you talk about some of the underlying assumptions for core Home Depot and speak to the offsets that would be helping mitigate that SRS dilution? Thanks so much.

Richard McPhail -- Executive Vice President, Chief Financial Officer

Sure. I pointed to -- you're right about that. We still have a little bit of a lap, and so there's pressure from SRS mix. Just two great call-outs.

Number one, our outstanding supply chain and merchandising teams finding productivity, and I could go on and on about it, but the benefits we've seen in supply chain productivity alone are really encouraging. And we would call out our fantastic store operations team who have now driven improvements in shrink for about a year and a half, year over year, quarter by quarter. We expect that to continue into 2025. And so it's really a story of SRS mix being offset by supply chain productivity, some other great things the merchants are doing, and our fantastic store ops team.

Seth Sigman -- Analyst

Thanks. Appreciate it.

Isabel Janci -- Vice President, Investor Relations and Treasurer

Christine, we have time for one more question.

Operator

Thank you. Our final question will come from the line of Zhihan Ma with Bernstein. Please proceed with your question.

Zhihan Ma -- Analyst

Hi. Thank you so much for taking my question. Just a final quick one. How does your complex Pro initiatives impact your long-term ROIC expectations, taking into account that you are extending more trade credit and potentially holding more inventory with a broader assortment from here? Thank you.

Ted Decker -- Chairman, President, and Chief Executive Officer

I wouldn't expect meaningful impact on ROIC through capital investments. We've talked about driving incremental sales and profit dollar growth. That business has a different margin profile but certainly incremental sales and profit growth, but it's really a reasonably asset-light investment. We lease the DCs.

We lease trucks. We bring on sales teams that are commissioned sales forces that sort of earn their keep as they build their portfolios. Trade credit, as we scaled out, were tiny, tiny exposure at the moment. But as we build that, it's just not going to be a meaningful balance sheet item given the scale of our overall balance sheet.

Zhihan Ma -- Analyst

Great. Thank you.

Operator

Ms. Janci, I would now like to turn the floor back over to you for closing comments.

Isabel Janci -- Vice President, Investor Relations and Treasurer

Thank you, Christine, and thank you, everybody, for joining us today. We look forward to speaking with you on our first quarter earnings call in May.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Isabel Janci -- Vice President, Investor Relations and Treasurer

Ted Decker -- Chairman, President, and Chief Executive Officer

Ann-Marie Campbell -- Senior Executive Vice President

Billy Bastek -- Executive Vice President, Merchandising

Richard McPhail -- Executive Vice President, Chief Financial Officer

Simeon Gutman -- Analyst

Christopher Horvers -- Analyst

Chris Horvers -- Analyst

Michael Lasser -- Analyst

Jordan Broggi -- Executive Vice President, Customer Experience and President, Online

Scot Ciccarelli -- Analyst

Karen Short -- Analyst

Steve Zaccone -- Analyst

Seth Sigman -- Analyst

Zhihan Ma -- Analyst

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Home Depot (HD) Q4 2024 Earnings Call Transcript was originally published by The Motley Fool