Home Depot (HD) Earnings Date & Reports

Key Takeaways

• Total sales rose 5.7% year over year to $47.86 billion, topping Wall Street's roughly $47.27 billion consensus estimate.
• Adjusted diluted earnings per share (EPS) came in at $4.92, up 5.1% from $4.68 a year earlier and above the $4.73 analysts expected.
• Comparable sales increased 1.7% overall and 1.3% in the U.S., marking the strongest quarterly result since the third quarter of fiscal 2022.
• Gross margin benefited from roughly $685 million in tariff refunds, while higher fuel, energy, and product costs continued to pressure profitability.
• Management reaffirmed its full-year fiscal 2026 outlook rather than raising it, citing persistent housing-market uncertainty.
• The results arrived while Chief Executive Officer (CEO) Ted Decker is on a temporary medical leave of absence.

Earnings Context and Why It Matters

The Home Depot's quarterly earnings are closely watched as a barometer for U.S. consumer spending on housing and home improvement. The retailer has spent several quarters navigating elevated mortgage rates, historically low housing turnover, and cautious demand for larger discretionary projects. This report carried added weight because it arrived during a leadership transition, with CEO Ted Decker on temporary medical leave. Investors were looking for evidence that the company's investments in its professional (Pro) customer ecosystem, digital capabilities, and delivery network are translating into market-share gains even as the broader housing backdrop remains soft.

Reported Results

The Home Depot reported second-quarter fiscal 2026 sales of $47.86 billion, a 5.7% increase from the prior-year period and ahead of the roughly $47.27 billion consensus. Comparable sales rose 1.7% overall and 1.3% in the U.S., exceeding expectations for a gain of about 0.9%. Adjusted diluted EPS of $4.92 beat the $4.73 consensus estimate and improved 5.1% from $4.68 a year ago. On a generally accepted accounting principles (GAAP) basis, diluted EPS was $4.79, up from $4.58.

Gross margin expanded to 33.7%, helped by approximately $685 million in tariff refunds under the International Emergency Economic Powers Act (IEEPA). Operating margin of 14.3% was slightly below the prior year's 14.5%, while adjusted operating margin came in at 14.7%. Comparable average ticket rose 2.8%, while comparable transactions declined 1%. Online comparable sales grew 11%, a fifth consecutive quarter of double-digit growth.

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Market Reaction and Investor Sentiment

Despite the top- and bottom-line beats, the market's response was relatively muted. The Home Depot shares edged slightly higher in premarket trading and traded around $340 the day of the report, as investors weighed the stronger-than-expected quarter against management's decision to hold full-year guidance unchanged. Sentiment remained cautious, with analysts noting that the beat was partly supported by one-time tariff refunds and that larger home-improvement projects remain under pressure from high interest rates and low housing turnover. The company's commentary describing the housing market as effectively "frozen" reinforced the view that a sustained demand recovery has not yet been confirmed.

Forward Outlook and Key Factors to Monitor

The Home Depot reaffirmed its fiscal 2026 guidance, including total sales growth of approximately 2.5% to 4.5%, comparable sales growth of roughly flat to 2.0%, gross margin of about 33.1%, and adjusted operating margin of 12.8% to 13.0%. Diluted EPS is expected to grow roughly flat to 4% from $14.23 in fiscal 2025.

Investors will want to watch whether comparable-sales momentum continues into the back half of the fiscal year. Management noted that the tariff refunds are expected to be fully offset by cost pressures over the full year, meaning gross margin may face additional pressure in the third and fourth quarters.

Several other factors merit monitoring. The timing of CEO Ted Decker's return from medical leave will be a key governance consideration. The pace of housing turnover and any movement in mortgage rates remain the largest macro drivers of demand for bigger projects. Finally, the continued ramp of digital sales and Express Delivery, along with the integration of the SRS and GMS acquisitions, will be important indicators of whether the company can keep taking share in a challenging environment.

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