Quick Verdict
Home Depot reported Q2 fiscal 2026 adjusted EPS of $4.92 and revenue of $47.86 billion, surpassing Wall Street expectations of $4.73 and $47.27 billion, respectively. Comparable sales returned to growth, while management reaffirmed full-year guidance. HD shares rose about 0.75% in premarket trading after the release.
About The Home Depot
The Home Depot, Inc. (NYSE: HD) is the world’s largest home-improvement retailer, selling building materials, tools, appliances, décor, and related services to DIY consumers, professional contractors, and tradespeople. Founded in 1978 by Bernard Marcus, Arthur Blank, Kenneth Langone, and Pat Farrah, the company is headquartered in Atlanta, Georgia. It operated 2,364 retail stores and more than 1,340 SRS distribution locations at the end of the second quarter, spanning the U.S., Canada, Mexico, Puerto Rico, the U.S. Virgin Islands, and Guam. The company reported more than 470,000 associates.
As of August 18, 2026, Home Depot’s market capitalization was approximately $343.3 billion, with a trailing P/E ratio of about 23.6x and a forward annual dividend yield of roughly 2.71%. The retailer’s scale, professional-customer exposure, and SRS Distribution business make it a major beneficiary of longer-term repair, remodel, and construction demand—although big-ticket discretionary projects remain sensitive to housing-market and financing conditions.
Top Financial Highlights
- Q2 fiscal 2026 net sales reached $47.861 billion, increasing 5.7% year over year from $45.277 billion.
- Comparable sales increased 1.7%, versus a 1.0% comparable-sales gain in Q2 fiscal 2025.
- U.S. comparable sales rose 1.3%, indicating a return to positive domestic same-store growth.
- GAAP net earnings were $4.766 billion, up 4.7% from $4.551 billion in the prior-year quarter.
- Diluted GAAP EPS was $4.79, up 4.6% from $4.58 in Q2 fiscal 2025.
- Adjusted diluted EPS was $4.92, a 5.1% increase from $4.68; the adjustment excludes acquired-intangible amortization and related taxes.
- Gross profit increased 6.5% to $16.115 billion, producing a calculated gross margin of 33.7%, up from about 33.4% a year earlier.
- Operating income rose 4.3% to $6.839 billion, while operating margin decreased to 14.3% from 14.5%, reflecting expense growth that outpaced revenue growth.
- Selling, general, and administrative expense increased 8.5% to $8.424 billion; total operating expenses rose 8.2% to $9.276 billion.
- The company generated $11.422 billion of operating cash flow during the first six months of fiscal 2026, up from $8.968 billion in the comparable prior-year period. The release does not separately disclose quarterly operating cash flow.
- Cash and cash equivalents ended the quarter at $2.085 billion, compared with $1.389 billion at fiscal year-end February 1, 2026.
- Merchandise inventory was $26.847 billion, up from $25.817 billion at the fiscal-year end, while total debt—including short-term debt and current and non-current long-term debt—was approximately $52.896 billion.
- Customer transactions fell 0.8% to 443.2 million, but average ticket increased 2.8% to $92.50. This suggests revenue growth was driven by higher spend per transaction rather than higher transaction volumes.
- Fiscal 2026 guidance was reaffirmed: total sales growth of approximately 2.5%–4.5%, comparable-sales growth of approximately 0%–2.0%, and roughly 15 new stores.
- Management continues to expect a fiscal-year gross margin of approximately 33.1%, GAAP operating margin of 12.4%–12.6%, and adjusted operating margin of 12.8%–13.0%.
- Full-year diluted EPS is expected to grow approximately flat to 4.0% from fiscal 2025’s $14.23; adjusted EPS is expected to grow approximately flat to 4.0% from $14.69.
Beat or Miss?
Home Depot delivered a top- and bottom-line beat relative to the LSEG analyst consensus. Adjusted earnings outperformed forecasts by $0.19 per share, while revenue exceeded consensus by roughly $0.59 billion. The 1.7% comparable-sales increase also marked a meaningful improvement in underlying demand, although transaction volume remained modestly lower.
| Metric | Reported | Difference/Analysis |
| Adjusted diluted EPS | $4.92 | Beat the $4.73 consensus by $0.19, or approximately 4.0%. |
| Revenue | $47.86 billion | Beat the $47.27 billion consensus by about $0.59 billion, or roughly 1.2%. |
| Comparable sales | 1.70% | Positive same-store growth and ahead of management’s prior cautious outlook; no directly cited consensus comp estimate was provided. |
| U.S. comparable sales | 1.30% | Indicates broad but moderate improvement in the core domestic retail business. |
| GAAP diluted EPS | $4.79 | Up 4.6% year over year; the consensus comparison commonly used by analysts was adjusted EPS. |
| Fiscal 2026 EPS outlook | Flat to +4.0% | Guidance was reaffirmed rather than raised, preserving a measured outlook amid housing-market uncertainty. |
What Leadership Is Saying
The press release attributes comments on quarterly performance to CFO Richard McPhail and Senior EVP Ann-Marie Campbell; it does not include a separate quote from CEO Ted Decker. The following are the two distinct leadership comments disclosed in the release.
“Our second quarter results exceeded our expectations. We saw broad based demand across the business as customers continued to engage in smaller projects.”
— Richard McPhail, Executive Vice President and Chief Financial
“This quarter’s results were a testament to our investments across the business and our associates’ focus on customer service. Our teams did an exceptional job executing throughout a dynamic environment, and I would like to thank them for their continued hard work and dedication.”
— Ann-Marie Campbell, Senior Executive Vice
On the accompanying earnings call, management said it was encouraged by the “underlying demand” in the business and expected to continue growing market share, while maintaining its fiscal 2026 outlook. The company’s strategy remains centered on store and branch expansion, professional-customer capabilities, acquisition integration, supply-chain investment, and customer-service execution.
Historical Performance
| Category | Q2 Fiscal 2026 | Q2 Fiscal 2025 | Change (%) |
| Revenue / Net sales | $47.861 billion | $45.277 billion | 5.70% |
| Net income | $4.766 billion | $4.551 billion | 4.70% |
| Gross profit | $16.115 billion | $15.125 billion | 6.50% |
| Operating expenses | $9.276 billion | $8.570 billion | 8.20% |
| Operating income | $6.839 billion | $6.555 billion | 4.30% |
| Diluted EPS | $4.79 | $4.58 | 4.60% |
| Adjusted diluted EPS | $4.92 | $4.68 | 5.10% |
The financial profile shows a constructive recovery in sales, but not an across-the-board margin expansion. Gross profit grew faster than sales, yet SG&A and total operating expenses increased more quickly, pushing operating margin down 20 basis points to 14.3%. The mix of falling transactions and rising average ticket also points to a consumer who remains selective—engaging in smaller projects and spending more per visit, but not yet generating robust volume growth.
Competitor Comparison
Direct Q2 fiscal 2026 peer results are not disclosed in Home Depot’s August 18 release and should not be inferred from its consolidated results. The most useful company-level comparison in this article therefore contrasts Home Depot’s current quarter with its own prior-year period; a validated peer comparison requires each competitor’s separately reported quarter, which may not align precisely with Home Depot’s fiscal calendar.
| Category | Home Depot Q2 Fiscal 2026 | Home Depot Q2 Fiscal 2025 | Change (%) |
| Revenue / Net sales | $47.861 billion | $45.277 billion | 5.70% |
| Net income | $4.766 billion | $4.551 billion | 4.70% |
| Operating expenses | $9.276 billion | $8.570 billion | 8.20% |
For a true competitor set, the most relevant listed U.S. home-improvement retail peer is Lowe’s, while broader retail comparisons can include Walmart, Target, and specialty building-product distributors. However, those companies’ reporting periods, business mix, and segment definitions differ. A fair competitor table should normalize for fiscal calendar, comparable sales, gross margin, operating margin, pro/professional exposure, and e-commerce sales rather than comparing headline revenue alone.
How the Market Reacted?
Investors initially responded positively to Home Depot’s earnings beat. Shares rose approximately 0.75% to $340.40 in premarket trading after closing the preceding session at $337.88, according to a contemporaneous earnings-call report.
The reaction was constructive but restrained rather than euphoric. Investors appeared to welcome the stronger-than-expected EPS, revenue, and return to positive comparable sales, while remaining cautious about subdued customer transaction volumes, a “frozen” housing-market backdrop, and the company’s decision to reaffirm—rather than raise—full-year guidance.
