Home Depot, Inc. (The)
HD · NYSE
Next quarter
Expected to report Nov 17, 2026 — estimated from last year’s reporting date.
Consensus is $3.87 EPS for Oct 2026 across 11 estimates, ranging $3.76 to $3.98.
HD Jul 2026
- 4.46%
- $4.71
- $4.92
- —
- $47.86B
Reported results
- $47.86B
- $6.84B
- $4.77B
- $4.79
Highlights
- Sales: Second-quarter net sales rose 5.7% year over year to $47.86 billion, while comparable sales increased 1.7% and U.S. comparable sales increased 1.3%.
- Earnings beat: Adjusted diluted EPS was $4.92, ahead of the $4.71 consensus by 4.46%, and up 5.1% from $4.68 a year earlier.
- Customer mix: Comparable transactions declined 1.0%, but comparable average ticket increased 2.8% to $92.50, as customers continued to undertake smaller projects.
- Profitability: GAAP operating income increased 4.3% to $6.84 billion, although operating margin contracted 20 basis points to 14.3% as operating expenses grew 8.2%.
- Guidance: Home Depot reaffirmed fiscal 2026 guidance for 2.5%-4.5% sales growth, flat-to-2.0% comparable sales growth, and 0%-4.0% diluted EPS growth.
- Cash generation: Operating cash flow for the first six months rose 27.4% to $11.42 billion, while capital expenditures were $1.72 billion and acquisition spending was $1.33 billion.
- Network: The company ended the quarter with 2,364 retail stores and more than 1,340 SRS locations, supported by more than 470,000 associates.
Analysis
Home Depot delivered a better-than-expected second quarter, with adjusted EPS of $4.92 versus the $4.71 consensus and $4.68 a year earlier. Sales increased 5.7% to $47.86 billion, accelerating from $41.35 billion in the last reported quarter in the supplied file, while GAAP net income rose 4.7% year over year to $4.77 billion. Compared with that prior quarter, operating income increased from $5.35 billion to $6.84 billion and diluted EPS from $3.62 to $4.79, though the comparison is affected by normal retail seasonality and the supplied periods are not sequentially labeled.
The defining feature of the print was modest but broad-based consumer demand rather than a sharp traffic recovery. Comparable transactions fell 1.0%, but a 2.8% increase in average ticket drove 1.7% comparable sales growth, consistent with management’s view that customers are engaging in smaller projects. Gross profit rose 6.5%, but SG&A increased 8.5%, leaving operating margin down to 14.3% from 14.5%. Home Depot nevertheless reaffirmed its full-year outlook, including the expected benefit of IEEPA tariff refunds, which should partly offset higher fuel, energy and product-input costs. First-half operating cash flow improved substantially, providing support for dividends, debt repayment, capital investment and acquisitions.
Demand and ticket growth
The quarter showed improving sales productivity without a return to positive traffic. Comparable sales increased 1.7%, up from 1.0% in the year-ago quarter, while U.S. comparable sales rose 1.3%. The sales increase was driven by larger baskets rather than more visits: comparable transactions declined 1.0%, whereas comparable average ticket increased 2.8% to $92.50. Total transactions fell 0.8% to 443.2 million, indicating that customer engagement remained selective.
- Project profile: Management described demand as broad-based, with customers continuing to focus on smaller projects rather than larger discretionary renovations.
- Year-to-date trend: First-half comparable sales increased 0.4%, with transactions down 0.5% and average ticket up 0.7%, so the second-quarter improvement was stronger than the first-half run rate.
Margins and earnings
Home Depot converted the sales growth into a 4.3% increase in GAAP operating income to $6.84 billion and a 4.7% increase in net earnings to $4.77 billion. GAAP diluted EPS rose 4.6% to $4.79, while adjusted diluted EPS increased 5.1% to $4.92, reflecting $0.13 of after-tax acquired-intangible amortization adjustment. The adjusted result exceeded consensus by $0.21 per share.
- Gross profit: Gross profit increased 6.5% to $16.12 billion, but gross margin eased to 33.7% from 33.4%? The release provides gross profit and cost of sales but does not state the comparative gross-margin percentage; fiscal-year guidance is approximately 33.1%.
- Operating leverage: Total operating expenses grew 8.2% to $9.28 billion, including an 8.5% increase in SG&A, causing operating margin to decline to 14.3% from 14.5%.
- Acquisition amortization: Acquired-intangible amortization was $178 million, including $125 million related to SRS, compared with $139 million in the year-ago quarter.
Fiscal 2026 outlook
Management reaffirmed its full-year fiscal 2026 outlook despite the uncertain cost environment. The guidance incorporates IEEPA tariff refunds, which are expected to partially offset unplanned fuel, energy and other product-input costs during the year. The range implies continued low-single-digit demand growth and limited EPS expansion.
- Revenue: Total sales growth is expected at approximately 2.5%-4.5%, with comparable sales ranging from flat to 2.0%.
- Profitability: Gross margin is expected near 33.1%, GAAP operating margin at 12.4%-12.6%, and adjusted operating margin at 12.8%-13.0%.
- Earnings and investment: Diluted EPS is expected to grow 0%-4.0% from $14.23, adjusted EPS is expected to grow 0%-4.0% from $14.69, capital expenditures should equal approximately 2.5% of sales, and roughly 15 new stores are planned.
Cash flow and capital
First-half cash generation was a meaningful positive. Net cash provided by operating activities rose to $11.42 billion from $8.97 billion, helped by a $570 million working-capital contribution versus a $1.82 billion use in the prior-year period. Capital expenditures were broadly unchanged at $1.72 billion, while payments for acquired businesses increased to $1.33 billion from $233 million.
- Shareholder returns: Home Depot paid $4.64 billion in cash dividends during the first six months, up from $4.57 billion a year earlier.
- Debt: The company repaid $3.04 billion of long-term debt and ended the quarter with $43.95 billion of long-term debt, plus $4.25 billion of short-term debt.
- Liquidity: Cash and cash equivalents were $2.09 billion at quarter-end, compared with $2.80 billion a year earlier and $1.39 billion at fiscal year-end.
