ATLANTA, August 18, 2026, 07:07 EDT
Shares of The Home Depot, Inc. NYSE:HD rose around 1% in volatile premarket trading after the company reported second-quarter sales and adjusted earnings that surpassed expectations. The retailer maintained its full-year outlook.
The outcome proved more robust than the headline implies. Comparable transactions declined by 1.0%, while the average ticket increased 2.8% to $92.50. Combined, these shifts account for the stated 1.7% growth in comparable sales.
| Comparable-sales driver | Q2 fiscal 2026 | Q2 fiscal 2025 | Investor read-through |
|---|---|---|---|
| Comparable customer transactions | -1.0% | -0.4% | Decline in traffic persisted |
| Comparable average ticket | +2.8% | +1.4% | Growth driven by pricing and product mix |
| Average ticket | $92.50 | $90.01 | Yearly increase of $2.49 |
| Comparable sales | +1.7% | +1.0% | Growth remained, led by average ticket |
The composition is important for investors. Beating expectations through tickets may boost short-term earnings, though it provides limited indication that customer activity has recovered. The U.S. cash market remained shut at the time of publication.
Quarterly sales increased by 5.7% to $47.86 billion for the period ending August 2, surpassing the LSEG consensus estimate of $47.27 billion. Adjusted earnings reached $4.92 per share, above the projected $4.73.
| Q2 measure | Reported | Comparison | Change or surprise |
|---|---|---|---|
| Net sales | $47.861 billion | $45.277 billion in the same period last year | Increase of 5.7% |
| Comparable sales | +1.7% | +1.0% in the prior year | Rising by 0.7 percentage point |
| U.S. comparable sales | +1.3% | Not available in this table | Positive |
| Adjusted EPS | $4.92 | $4.73 LSEG estimate | 4.0% higher than forecast |
| GAAP operating margin | 14.3% | 14.5% for the same period a year ago | Down 20 basis points |
Total sales increased at a rate four percentage points above comparable sales. The difference highlights how acquisitions and new locations are contributing to revenue as demand at established stores remains muted.
Sales outpaced expectations, but margins lagged. GAAP operating margin edged down to 14.3% from 14.5%. Adjusted operating margin declined by ten basis points to 14.7%, though adjusted operating income increased by 4.8%.
Management reported continuing customer interest in smaller-scale projects. CFO Richard McPhail noted demand was widespread and that the quarter outperformed forecasts.
The trend aligns with a sluggish housing market. Elevated borrowing costs and affordability challenges persist in limiting home sales and major financed renovation projects. Routine maintenance, painting, and landscaping hold up better.
Home Depot maintained its key fiscal 2026 goals, with the midpoint continuing to indicate slight comparable sales growth and minimal earnings leverage.
| Fiscal 2026 guidance | Company target | Status after Q2 |
|---|---|---|
| Total sales growth | 2.5% to 4.5% | Confirmed |
| Comparable-sales growth | Flat to +2.0% | Confirmed |
| Adjusted EPS growth | Flat to +4.0% from $14.69 | Confirmed |
| Gross margin | About 33.1% | Confirmed |
| Adjusted operating margin | 12.8% to 13.0% | Confirmed |
| Capital expenditure | About 2.5% of sales | Confirmed |
The forecast factors in anticipated IEEPA tariff refunds. Home Depot stated these refunds are expected to partially counterbalance unexpected expenses for fuel, energy and product inputs. However, while the offset provides support, it does not drive demand.
Wall Street sentiment stays positive, but confidence varies. MarketBeat’s survey of 32 analysts indicates 18 rate the stock as a buy, 13 as a hold, and one as a sell, with an average price target of $371.71.
| Date | Firm | Analyst | Recommendation | Target |
|---|---|---|---|---|
| July 27, 2026 | DA Davidson | Michael Baker | Buy, maintained | $377 |
| July 20, 2026 | Guggenheim | Steven Forbes | Buy, maintained | $425 |
| June 23, 2026 | Wolfe Research | Spencer Hanus | Peer Perform, cut | Not stated |
| June 4, 2026 | Jefferies | Jonathan Matuszewski | Buy, price target reduced | $360 |
| May 20, 2026 | RBC Capital | Steven Shemesh | Sector Perform, price target cut | $340 |
Leadership presents another immediate factor. CEO Ted Decker is currently on temporary medical leave. Responsibilities are being handled by McPhail and senior executive Ann-Marie Campbell, while Decker is anticipated to return within months.
Risks: An extended housing freeze may maintain negative transaction volumes and push back major developments. Inventory increased by 8.1% from a year earlier, outpacing sales in the quarter. Margins tightened as well, reducing the ability to absorb higher input costs or softer ticket growth.
The next focus is on traffic. Lowe’s Companies, Inc. NYSE:LOW is set to report on Wednesday. Its transaction data will indicate if Home Depot’s growth, driven by ticket size, is a unique occurrence or reflects a broader trend in the sector.
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