Home Depot beat Wall Street expectations in its fiscal second quarter, with revenue rising 5.7% to $47.86 billion—surpassing the $47.27 billion analysts had forecast—as customers shifted toward smaller home projects despite a sluggish housing market.
The home improvement retailer reported adjusted earnings per share of $4.92, above the $4.73 consensus estimate, while comparable sales climbed 1.7%, significantly outpacing the 0.9% increase Wall Street expected. CFO Richard McPhail told CNBC the company achieved “the highest comparable sales number the company has posted since the fiscal third quarter of 2022.”
Customer behavior revealed a clear pattern: shoppers visited less frequently but spent more per visit. Average ticket sizes over $1,000 rose 2.4% year-over-year, and spring outdoor categories—including live goods, mulch, patio items, and grills—drove momentum. Thirteen of 16 product categories posted positive comparable sales growth.
However, Home Depot’s CFO painted a sobering picture of the broader market. McPhail described the company as operating in “frozen housing market conditions,” noting that 30-year fixed mortgage rates remained around 6.7%, keeping housing turnover at record lows. “While we’re happy with their level of engagement in the first half, they do tell us they’re worried about inflation, about fuel costs and about general uncertainty,” McPhail told CNBC, explaining why customers remain hesitant about larger discretionary projects.
Despite the solid quarter, Home Depot reaffirmed its fiscal 2026 guidance rather than raising it. The company maintained its outlook for total sales growth of 2.5% to 4.5% and comparable sales growth of flat to 2%, citing the uncertain market environment. McPhail said the company received $730 million in tariff refunds during the quarter, with $685 million reducing cost of goods sold to help offset rising fuel, energy, and material costs.
The performance contrasts with the prior year. In Q2 2025, Home Depot reported comparable sales growth of just 1%, meaning the current quarter’s 1.7% represents a meaningful acceleration despite the housing headwinds. McPhail emphasized the company’s confidence in its long-term position: “The story of the quarter is a story of share gain with the pro and the consumer, and we’re confident that our investments are working to allow us to win in the market.”
Home Depot has focused on attracting professional contractors, a customer segment largely insulated from housing market weakness. The company also noted broad engagement across both its do-it-yourself and pro businesses, with 13 of 16 categories showing positive same-store sales growth. McPhail told investors the company remains committed to investment despite the frozen housing environment, betting that “over the long run, conditions for home improvement demand are strong.”
Sources
- CNBC — Home Depot Q2 2026 earnings beat, CFO commentary on frozen housing market and tariff refunds
- Yahoo Finance — Home Depot Q2 earnings results, customer behavior shift toward smaller projects, comparable sales beat
- Home Depot Investor Relations — Official Q2 2026 earnings announcement with revenue, EPS, and comparable sales figures
