Key Highlights
- First-quarter adjusted earnings per share reached $3.43, surpassing analyst consensus of $3.41, representing a decline from last year’s $3.56
- Quarterly revenue hit $41.77 billion, marking a 4.8% year-over-year increase and exceeding the $41.59 billion forecast
- Comparable store sales increased 0.6%, including a 0.4% rise in U.S. locations; transaction value grew 2.3% to $92.76
- Management maintained its full-year outlook projecting comparable sales growth between flat and 2%, with adjusted EPS growth of flat to 4%
- HD shares have declined over 12% year-to-date in 2026, trailing both Lowe’s performance and the S&P 500 index
Home Depot (HD) shares moved higher by 0.7% during premarket hours on Tuesday following the release of first-quarter financial results that surpassed Wall Street’s expectations.
The company delivered adjusted earnings per share of $3.43, marginally exceeding the analyst consensus estimate of $3.41. However, this represents a decrease from the $3.56 reported during the comparable quarter last year. Total revenue climbed 4.8% to reach $41.77 billion, outpacing the anticipated $41.59 billion.
Net earnings for the three-month period decreased 4.2% to $3.29 billion, compared with $3.43 billion in the prior-year quarter. Diluted earnings per share registered at $3.30, down from $3.45 in Q1 2025.
Comparable store sales demonstrated growth of 0.6% overall, while U.S. comparable sales advanced 0.4%. Total customer transactions declined 1.3%, though this was offset by a 2.3% increase in average transaction value, which reached $92.76.
Chief Executive Officer Ted Decker indicated that customer demand patterns remained “relatively similar” to trends observed throughout fiscal year 2025, while acknowledging that consumer uncertainty and challenges with housing affordability continue to create headwinds.
The home improvement giant reaffirmed its fiscal 2026 guidance, projecting total sales growth between 2.5% and 4.5%, comparable sales growth ranging from flat to 2%, and adjusted diluted earnings per share growth of flat to 4% compared to the $14.69 achieved in fiscal 2025.
Large-Scale Home Projects Remain Stalled
Chief Financial Officer Richard McPhail highlighted persistent hesitation among property owners regarding substantial renovation undertakings. “They continue to tell us that they are going to defer their spend on larger projects,” he informed CNBC. “That’s consistent with what they’ve told us the last few years.”
HD stock has experienced a decline exceeding 12% since the beginning of 2026, underperforming competitor Lowe’s, which is down less than 10%, and significantly trailing the S&P 500 index, which has gained nearly 8% during the same timeframe.
Oppenheimer analyst Brian Nagel, in commentary published prior to the earnings release, expressed growing concern that “shorter-term macro headwinds may be turning more challenging, as rates shift higher, and confidence wanes.”
Rising inflation reaching three-year peaks combined with stagnant wage growth have extended the anticipated timeline for any substantial sales recovery across the home improvement retail sector.
Strengthening Professional Customer Base
Professional buyers — including contractors, roofing specialists, and skilled trade workers — represent approximately half of Home Depot’s total revenue, and the retailer has intensified its focus on this customer segment.
The company’s 2024 purchase of SRS Distribution expanded its network serving professionals in roofing, landscaping, and pool maintenance. The subsequent GMS acquisition broadened its presence in specialty construction materials.
Just last week, SRS completed the acquisition of Mingledorff’s, a wholesale supplier of HVAC systems, components, and related supplies.
McPhail emphasized that the acquisition strategy targets capturing a larger portion of the $700 billion professional contractor market.
As of the end of Q1, Home Depot maintained operations across 2,361 retail locations and more than 1,280 SRS facilities, employing over 470,000 team members.
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