Home Depot topped Wall Street's second-quarter revenue and profit targets as demand for small repair projects offset a prolonged housing-market slump. The retailer reaffirmed its full-year guidance and pointed to tariff refunds as a cushion against higher fuel and input costs.
Home Depot's net sales climbed 5.7% to $47.86 billion in the second quarter, beating the $47.27 billion analysts surveyed by LSEG had expected. Adjusted earnings per share reached $4.92, above the $4.73 those analysts had forecast.
Repair demand offsets a frozen housing market
Homeowners took on smaller, spring-focused do-it-yourself projects such as re-mulching landscaping and upgrading patios, while professional contractors completed decking, electrical and plumbing work. Stubbornly high interest rates have also pushed shoppers toward small-scale repair and maintenance projects such as painting and yard work, which helped offset the housing slowdown. But CFO Richard McPhail told CNBC the company is still gaining market share even as it operates in what he called "frozen housing market" conditions.
Comparable sales hit a multi-year high
Home Depot's comparable sales rose 1.7%, beating the 0.9% increase StreetAccount had projected, the strongest comparable-sales gain since Q3 2022. Net income reached $4.77 billion, or $4.79 per share, up from $4.55 billion a year earlier. Shares rose about 1% in premarket trading following the results.
Guidance holds as tariff refunds cushion costs
The company reaffirmed guidance for total sales growth between 2.5% and 4.5% for fiscal 2026, with operating margin expected between 12.4% and 12.6%. Home Depot said tariff refunds are expected to partially offset unplanned fuel, energy and other input costs. Rivals Lowe's and Target report earnings on Wednesday, followed by Walmart on Thursday, a lineup investors will watch for signs of the health of the U.S. consumer.
CEO on medical leave during earnings
Home Depot announced last week that CEO Ted Decker would take a temporary medical leave of absence. McPhail is overseeing financial management and the pro business, while Ann-Marie Campbell is managing day-to-day store operations. Decker's condition has not been disclosed, and he will not join the post-earnings call.
Sources: The Wall Street Journal (snippet-based), CNBC, Investing.com
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