ATLANTA, August 23, 2026, 05:17 EDT —
- Home Depot beat second-quarter sales and profit estimates, yet finished the week 0.96% lower.
- Transactions fell 1%, while a larger average ticket and $730 million tariff refund supported results.
- The stock erased about $1.5 billion of market value during earnings week.
- PCE inflation and the Federal Reserve’s Jackson Hole signals will test housing-sensitive shares next week.
Home Depot Inc. NYSE:HD beat quarterly forecasts but still lost 0.96% last week. The stock closed Friday at $335.61, leaving its market value near $336.0 billion. That was about $1.5 billion below the previous Friday.
The muted reaction reflects the quality of the beat. Customers spent more per trip, but transactions fell again. A $730 million tariff refund also cushioned product costs. Housing turnover and large renovations remained weak.
| Trading day | Close | Daily move | Volume |
|---|---|---|---|
| Aug. 17 | $337.88 | -0.29% | 5.58 million |
| Aug. 18 · earnings | $337.49 | -0.12% | 6.60 million |
| Aug. 19 | $344.30 | +2.02% | 4.97 million |
| Aug. 20 | $334.49 | -2.85% | 4.03 million |
| Aug. 21 | $335.61 | +0.33% | 3.32 million |
Second-quarter sales rose 5.7% to $47.86 billion. Analysts expected about $47.27 billion. Adjusted earnings reached $4.92 per share, beating the $4.73 consensus.
| Q2 measure | 2026 | 2025 | Change |
|---|---|---|---|
| Net sales | $47.86 billion | $45.28 billion | +5.7% |
| Net earnings | $4.77 billion | $4.60 billion | +3.7% |
| Diluted EPS | $4.79 | $4.58 | +4.6% |
| Adjusted EPS | $4.92 | $4.68 | +5.1% |
| Comparable sales | +1.7% | +1.0% | +0.7 point |
Chief Financial Officer Richard McPhail said Home Depot saw “broad based demand across the business.” Smaller repairs, maintenance and seasonal projects carried the quarter. Overall comparable sales grew at the fastest pace since late 2022.
The demand mix stayed defensive. Customer transactions declined 1%. Average spending per visit increased 2.8% to $92.50. Smaller projects grew 1.5%, while large projects fell 2.1%.
| Demand signal | Latest reading | Investor interpretation |
|---|---|---|
| Customer transactions | -1.0% | Traffic remains soft |
| Average ticket | $92.50, +2.8% | Price and mix offset visits |
| U.S. comparable sales | +1.3% | Modest domestic growth |
| Online sales | +11% | Fifth straight double-digit quarter |
| Large projects | -2.1% | Mortgage rates still restrain remodeling |
The tariff refund complicates comparison. Home Depot received $730 million, with $685 million reducing cost of goods sold. That benefit exceeded the roughly $189 million aggregate adjusted-EPS surprise on a preliminary share-count basis. It was not the only growth driver, but it materially improved the quarter.
Management kept its full-year outlook unchanged. Sales should grow 2.5% to 4.5%. Comparable sales should range from flat to 2% growth. Adjusted EPS is expected to be flat to 4% higher.
| Fiscal 2026 guide | Company outlook | What investors need |
|---|---|---|
| Total sales growth | 2.5%–4.5% | SRS and Pro scale |
| Comparable sales | 0%–2% | Traffic stabilization |
| Gross margin | About 33.1% | Cost discipline after refunds |
| Adjusted operating margin | 12.8%–13.0% | Limited expense slippage |
| Adjusted EPS growth | 0%–4% | Back-half execution |
Rival Lowe’s Cos. Inc. NYSE:LOW exposed the downside. Lowe’s cut its annual sales and profit forecasts after comparable sales rose only 0.2%. Its weaker DIY business supports Home Depot’s Pro-led strategy, but confirms the market remains fragile.
| Analyst | Rating | Target | Upside vs. $335.61 |
|---|---|---|---|
| Guggenheim | Buy | $425 | 26.6% |
| UBS | Buy | $420 | 25.1% |
| Evercore ISI | Outperform | $400 | 19.2% |
| Goldman Sachs | Buy | $377 | 12.3% |
| Truist | Buy | $373 | 11.1% |
| RBC Capital | Sector Perform | $342 | 1.9% |
Analysts remain positive, but their targets diverge. UBS trimmed its target to $420. RBC lowered its target to $342. The gap shows how much value depends on a housing recovery rather than current traffic.
Next week shifts attention to rates. July PCE inflation arrives Wednesday at 8:30 a.m. EDT. The Jackson Hole symposium runs August 27–29, with Fed Chair Kevin Warsh speaking Friday. A lower-rate path would support housing turnover and larger projects.
Risks: Mortgage rates may remain high. Tariff refunds will not repeat indefinitely. CEO Ted Decker’s temporary medical leave adds leadership uncertainty, while SRS integration and softer Pro demand could pressure margins.
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