Earnings2 min read
Home Depot (HD): Q2 Fiscal 2026 Earnings Review
In brief
Home Depot reported Q2 FY2026 earnings on Aug 18; HD is an index_constituent and qualifies for P1 high-profile earnings coverage.
Home Depot reported Q2 FY2026 results (May–July 2026) on August 18. Sales reached $47.9 billion, up 5.7% year-over-year. Adjusted diluted earnings per share came in at $4.92, versus $4.68 a year ago. Management reaffirmed its full-year fiscal 2026 guidance, citing expected IEEPA tariff refunds to offset higher input costs.
What's behind Home Depot's results
1. Comparable Sales Beat Internal Expectations
Comparable sales rose 1.7% in the quarter, with U.S. comps up 1.3%. Both sit above the company's full-year guidance of "approximately flat to 2.0%." CFO Richard McPhail said results "exceeded our expectations," citing broad-based demand as customers engaged in smaller projects. Sustained low-single-digit comps matter more than headline revenue. They show housing-driven softness is gradually stabilizing.
2. Average Ticket Is Doing the Heavy Lifting
Growth came entirely from bigger baskets, not more shoppers. Comparable customer transactions fell 1.0% year-over-year. The comparable average ticket jumped 2.8% to $92.50. This pattern, fewer visits, larger baskets, is familiar for Home Depot. It suggests big-ticket discretionary work (decking, appliances, kitchen remodels) is recovering faster than routine trips.
3. Guidance Reaffirmed Despite Tariff Headwinds
Management kept fiscal 2026 guidance unchanged. Total sales growth is guided to 2.5%–4.5%. Comparable sales are guided roughly flat to +2.0%. Adjusted diluted EPS growth is guided flat to +4.0% off the $14.69 base. Holding the line matters because the company is absorbing tariff-related fuel, energy, and product-cost inflation, partially offset by IEEPA tariff refunds.
Historical Context
This quarter's 1.7% comparable sales gain is in the same low-single-digit range Home Depot has posted for several quarters as the post-housing-boom slowdown eased. The direction of travel has been steady improvement rather than a sharp inflection. Adjusted EPS growth of +5.1% year-over-year ($4.92 versus $4.68) extends that gradual trend. The pattern looks like a slow grind higher, not a breakout.
Stocks We Like More Than Home Depot
For investors wanting more direct housing-recovery exposure, D.R. Horton (DHI) and Lennar (LEN) offer levered upside if rates fall. Neither is a home-improvement retailer. But both move earlier in the housing cycle than Home Depot, which historically lags turnarounds in existing-home turnover.