Home Depot beats Q2 estimates, reaffirms guidance as housing stays frozen

Home Depot reported fiscal second-quarter revenue of $47.9 billion, up 5.7% from a year earlier and ahead of the $47.27 billion consensus.

"We continue to operate in what I call 'frozen housing market' conditions, but we also know that we're taking share and that we're serving our customers better every day," CFO Richard McPhail said.

Adjusted diluted earnings per share came in at $4.92, beating the $4.73 estimate, while net earnings rose to $4.8 billion, or $4.79 per share, from $4.6 billion, or $4.58, a year earlier. Comparable sales climbed 1.7%, the highest since the third fiscal quarter of 2022, with comparable customer transactions down 1% and average ticket up 2.8% to $92.50.

Metric	Actual	Consensus	Beat/Miss
Revenue	$47.9B	$47.27B	+1.3%
Adjusted EPS	$4.92	$4.73	+$0.19
Comparable sales	+1.7%	+0.9%	+0.8 pts

The company reaffirmed fiscal 2026 guidance of 2.5%-4.5% sales growth and operating margin of 12.4%-12.6%, with IEEPA tariff refunds expected to partially offset unplanned fuel, energy, and other product input costs. McPhail said the refunds allow the retailer to "maintain value" despite cost pressures elsewhere.

Home Depot has been pressured by lower housing turnover and higher mortgage rates as customers defer larger remodeling projects tied to home purchases. McPhail said the company's customer base remains "a healthy cohort" but stays hesitant on big-ticket work because of inflation and fuel costs. The retailer has leaned into its pro business, integrating SRS, GMS, HD Supply and Construction Resources, with a roughly $400 million cross-sell run rate expected this year.

CEO Ted Decker is on a temporary medical leave of absence announced last week. Ann-Marie Campbell, senior executive vice president of U.S. stores and operations, is overseeing day-to-day operations, while McPhail heads financial management and the pro business. Jefferies downgraded Home Depot to Hold from Buy this month, citing minimal profit growth and five straight quarters of declining customer transactions.

The reaffirmed guidance points to demand holding through the second half, though the frozen housing backdrop keeps a lid on larger projects. Investors will watch the fiscal third-quarter results in November for any shift in consumer spending on big-ticket remodeling.

This article is for informational purposes only and does not constitute investment advice.