Home Depot Inc. (NYSE: HD) reported stronger-than-expected second-quarter results on Tuesday, beating Wall Street forecasts for both earnings and revenue.
Despite the earnings beat, Home Depot shares traded broadly flat shortly after the market opened.
Home Depot Earnings Beat Wall Street Estimates
Adjusted earnings per share came in at $4.92, exceeding the consensus estimate of $4.73 by $0.19.
Revenue reached $47.86 billion, also topping analysts’ expectations of $47.23 billion.
Sales increased 5.7% from $45.28 billion during the same quarter last year, highlighting continued growth despite challenges in the broader housing market.
Comparable Sales Return to Growth
Home Depot also reported improving comparable sales during the quarter.
Total comparable sales increased 1.7%, while comparable sales in the United States rose 1.3%.
Net earnings climbed to $4.8 billion, or $4.79 per diluted share. That compares with $4.6 billion, or $4.58 per share, during the same period a year earlier.
The results suggest that customers remain willing to spend on home improvement projects, even as activity in the housing market remains relatively subdued.
Smaller Home Improvement Projects Support Demand
Home Depot Chief Financial Officer Richard McPhail said the company’s second-quarter performance came in ahead of internal expectations.
Management highlighted broad-based customer demand, particularly for smaller home improvement projects.
The trend is important for Home Depot because high borrowing costs and housing affordability pressures have limited demand for larger renovation projects in recent periods.
Continued spending on smaller projects, however, has helped support overall sales.
Home Depot Reaffirms Fiscal 2026 Guidance
Following the stronger quarter, Home Depot maintained its fiscal 2026 outlook.
The company expects adjusted diluted earnings per share to range from flat growth to an increase of 4% compared with the $14.69 reported in fiscal 2025.
That implies adjusted earnings of approximately $14.69 to $15.28 per share, with a midpoint of roughly $14.99.
Home Depot also expects total sales to increase between approximately 2.5% and 4.5% for the full fiscal year.
Comparable sales are projected to range from flat growth to an increase of around 2%.
Margins and New Store Openings Remain in Focus
Home Depot expects a gross margin of approximately 33.1% during fiscal 2026.
Its adjusted operating margin is forecast to come in between approximately 12.8% and 13%.
The retailer also plans to open around 15 new stores during the fiscal year.
Home Depot said its current guidance incorporates expected IEEPA tariff refunds. Those refunds are expected to partially offset higher-than-planned fuel, energy and other product input costs.
Barclays Highlights Improving Sales Trends
Following the earnings report, Barclays analyst Seth Sigman pointed to improving demand as one of the most encouraging elements of the quarter.
Sigman noted that Home Depot delivered stronger sales and managed earnings effectively, while tariff refunds also provided some support.
He added that the gradual improvement in sales trends may be the most important takeaway, particularly because the broader housing market has shown limited progress.
For investors, Home Depot’s ability to maintain sales momentum while reaffirming its fiscal 2026 outlook could remain a key factor to watch in the coming quarters.
