The Home Depot Announces First Quarter Fiscal 2026 Results; Reaffirms Fiscal 2026 Guidance
Rhea-AI Summary
Home Depot (NYSE:HD) reported first quarter fiscal 2026 net sales of $41.8 billion, up 4.8% year over year. Comparable sales rose 0.6% (U.S. +0.4%), with FX adding about 55 bps.
Net earnings were $3.3 billion and diluted EPS $3.30, both down about 4% from fiscal 2025. Adjusted diluted EPS was $3.43, versus $3.56 a year ago. Operating income declined 3.0% to $5.0 billion.
Home Depot generated $6.0 billion in operating cash flow, versus $4.3 billion in the prior-year quarter, and ended the quarter with 2,361 stores and over 1,280 SRS locations. The company reaffirmed fiscal 2026 guidance, including total sales growth of 2.5–4.5%, flat to 2.0% comparable sales growth, and diluted and adjusted diluted EPS expected to grow approximately flat to 4.0% from fiscal 2025.
Positive
- Net sales grew 4.8% year over year to $41.8 billion
- Comparable sales turned positive, rising 0.6% versus a 0.3% decline last year
- Operating cash flow increased to $6.0 billion from $4.3 billion
- Fiscal 2026 guidance reaffirmed with 2.5%–4.5% total sales growth
- Guided diluted and adjusted EPS growth approximately flat to 4.0%
- Approximately 15 new stores planned in fiscal 2026
Negative
- Net earnings declined 4.2% to $3.3 billion
- Diluted EPS fell 4.3% to $3.30
- Operating income decreased 3.0% despite higher sales
- Comparable customer transactions down 1.3%; total transactions down 0.9%
- Selling, general and administrative expenses rose 5.7%, faster than sales
- Merchandise inventories increased to $27.3 billion from $25.8 billion
News Market Reaction – HD
In the May 19 session, HD gained 0.88%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Historical Context
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 11 | Acquisition expansion | Positive | -1.9% | SRS completed Mingledorff's HVAC acquisition, expanding Pro offerings and TAM. |
| May 05 | Earnings call notice | Neutral | +1.0% | Announcement of Q1 earnings conference call and footprint overview. |
| May 04 | Governance agreement | Neutral | -3.5% | WEX and Impactive Capital cooperation agreement on refreshed director slate. |
| May 01 | Marketing partnership | Positive | -1.5% | Hertz–Home Depot military initiative with vehicle and home-upgrade prizes. |
| Apr 22 | AI service rollout | Positive | -1.4% | Launch of Google Cloud Gemini AI phone agents to speed customer support. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Recent history shows several positive strategic announcements accompanied by negative next-day price reactions, indicating a tendency for the stock to sell off or lag on good news.
Over the last few months, Home Depot has focused on strategic expansion and customer experience. SRS Distribution’s acquisition of Mingledorff's added an HVAC vertical and lifted the total addressable market to $1.2 trillion, yet the stock fell the next day. AI-powered Google Cloud phone agents and a military-focused Hertz partnership also preceded modest declines. By contrast, the simple scheduling notice for today’s earnings call coincided with a small gain. Against this backdrop, reaffirmed fiscal 2026 guidance and modest Q1 growth extend a cautious but execution-focused trajectory.
Key Terms
gross margin financial
operating margin financial
non-gaap financial measures financial
basis points financial
effective tax rate financial
capital expenditures financial
forward-looking statements regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
Net earnings for the first quarter of fiscal 2026 were
Adjusted(1) diluted earnings per share for the first quarter of fiscal 2026 were
"Our first quarter results were in line with our expectations. The underlying demand in our business was relatively similar to what we saw throughout fiscal 2025, despite greater consumer uncertainty and housing affordability pressure," said Ted Decker, chair, president and CEO. "As always, our associates provided excellent customer service during the quarter, and I would like to thank them for their continued hard work and dedication to serving our customers."
Fiscal 2026 Guidance
The company reaffirms its fiscal 2026 guidance:
- Total sales growth of approximately
2.5% to4.5% - Comparable sales growth of approximately flat to
2.0% - Approximately 15 new stores
- Gross margin of approximately
33.1% - Operating margin of approximately
12.4% to12.6% - Adjusted(1) operating margin of approximately
12.8% to13.0% - Effective tax rate of approximately
24.3% - Net interest expense of approximately
$2.3 billion - Diluted earnings-per-share to grow approximately flat to
4.0% from$14.23 - Adjusted(1) diluted earnings-per-share to grow approximately flat to
4.0% from$14.69 - Capital expenditures of approximately
2.5% of total sales
(1) The Company reports its financial results in accordance with |
The Home Depot will conduct a conference call today at 9 a.m. ET to discuss information included in this news release and related matters. The conference call will be available in its entirety through a webcast and replay at ir.homedepot.com/events-and-presentations.
At the end of the first quarter, the company operated a total of 2,361 retail stores and over 1,280 SRS locations across all 50 states, the
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained herein constitute "forward-looking statements" under the federal securities laws, including as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events, and use words such as "may," "will," "could," "should," "would," "anticipate," "intend," "estimate," "project," "plan," "believe," "expect," "target," "prospects," "potential," "commit" and "forecast," or words of similar import or meaning or refer to future time periods. Forward-looking statements may relate to, among other things: our brand and reputation; the demand for our products and services, including as a result of macroeconomic conditions and changing customer preferences and expectations; net sales growth; comparable sales; the effects of competition; implementation of interconnected, store, supply chain, technology, innovation and other strategic initiatives, including with respect to real estate; inventory, on-shelf availability, and in-stock positions; the state of the economy; the state of the housing and home improvement markets; the state of the credit markets, including mortgages, home equity loans, and consumer and trade credit; the impact of tariffs; trade policy changes or restrictions, or international trade disputes and efforts and ability to continue to diversify our supply chain; issues related to the payment methods we accept; demand for credit offerings including trade credit; management of relationships with our associates, jobseekers, suppliers and service providers; cost and availability of labor; costs of fuel and other energy sources; events that could disrupt our business, supply chain, technology infrastructure, or demand for our products and services, such as tariffs, trade policy changes or restrictions or international trade disputes, natural disasters, climate change, public health issues, cybersecurity events, and labor disputes; geopolitical tensions or conflicts, military conflicts, or acts of war; our ability to maintain a safe and secure store environment; our ability to address expectations regarding sustainability and human capital management matters and meet related goals; continuation or suspension of share repurchases; net earnings and margin performance; earnings per share; future dividends; capital allocation and expenditures; productivity; liquidity; return on invested capital; expense and debt leverage; changes in interest rates; changes in foreign currency exchange rates; commodity or other price inflation and deflation; our ability to issue debt on terms and at rates acceptable to us; the impact and expected outcome of investigations, inquiries, claims, and litigation; the challenges of operating in international markets; the adequacy of insurance coverage; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of legal and regulatory changes, including executive orders and other administrative or legislative actions, such as changes to tax laws and regulations; store openings and closures; financial outlook, including guidance for fiscal 2026; and the impact of acquired companies, including SRS and GMS, on our organization and the ability to recognize the anticipated benefits of completed or pending acquisitions.
These statements are not guarantees of future performance and are subject to future events, risks and uncertainties – many of which are beyond our control, dependent on the actions of third parties, or currently unknown to us – as well as potentially inaccurate assumptions that could cause actual results to differ materially from our historical experience and our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Part I, Item 1A. "Risk Factors," and elsewhere in our Annual Report on Form 10-K for our fiscal year ended February 1, 2026 and also as described from time to time in reports subsequently filed with the Securities and Exchange Commission. There also may be other factors that we cannot anticipate or that are not described herein, generally because we do not currently perceive them to be material. Such factors could cause results to differ materially from our expectations. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our filings with the Securities and Exchange Commission and in our other public statements.
Non-GAAP Financial Measures
To provide additional transparency, we supplement our disclosure with certain non-GAAP financial measures. When used in conjunction with our GAAP financial measures, we believe these supplemental non-GAAP financial measures will help management and investors to better understand and analyze our performance. However, this supplemental information should not be considered in isolation or as a substitute for the related GAAP measures. Refer to the end of this release for an explanation and definitions of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures.
THE HOME DEPOT, INC. (Unaudited) | |||||
Three Months Ended | |||||
in millions, except per share data | May 3, | May 4, | % Change | ||
Net sales | $ 41,765 | $ 39,856 | 4.8 % | ||
Cost of sales | 27,984 | 26,397 | 6.0 | ||
Gross profit | 13,781 | 13,459 | 2.4 | ||
Operating expenses: | |||||
Selling, general and administrative | 7,959 | 7,530 | 5.7 | ||
Depreciation and amortization | 841 | 796 | 5.7 | ||
Total operating expenses | 8,800 | 8,326 | 5.7 | ||
Operating income | 4,981 | 5,133 | (3.0) | ||
Interest and other (income) expense: | |||||
Interest income and other, net | (7) | (24) | (70.8) | ||
Interest expense | 611 | 615 | (0.7) | ||
Interest and other, net | 604 | 591 | 2.2 | ||
Earnings before provision for income taxes | 4,377 | 4,542 | (3.6) | ||
Provision for income taxes | 1,088 | 1,109 | (1.9) | ||
Net earnings | $ 3,289 | $ 3,433 | (4.2) % | ||
Basic weighted average common shares | 994 | 992 | 0.2 % | ||
Basic earnings per share | $ 3.31 | $ 3.46 | (4.3) | ||
Diluted weighted average common shares | 996 | 994 | 0.2 % | ||
Diluted earnings per share | $ 3.30 | $ 3.45 | (4.3) | ||
Three Months Ended | |||||
Selected sales data: | May 3, | May 4, | % Change | ||
Comparable sales (% change) | 0.6 % | (0.3) % | N/A | ||
Comparable customer transactions (% change) (1) | (1.3) % | (0.5) % | N/A | ||
Comparable average ticket (% change) (1) | 2.2 % | — % | N/A | ||
Customer transactions (in millions) (1) | 391.1 | 394.8 | (0.9) % | ||
Average ticket (1) | $ 92.76 | $ 90.71 | 2.3 | ||
(1) | Customer transactions and average ticket measures do not include results from HD Supply or SRS. | |||||||||||
THE HOME DEPOT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||
in millions | May 3, | May 4, | February 1, | ||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ 1,601 | $ 1,369 | $ 1,389 | ||
Receivables, net | 6,624 | 5,886 | 5,597 | ||
Merchandise inventories | 27,280 | 25,763 | 25,817 | ||
Other current assets | 1,667 | 1,511 | 1,588 | ||
Total current assets | 37,172 | 34,529 | 34,391 | ||
Net property and equipment | 27,930 | 26,780 | 28,021 | ||
Operating lease right-of-use assets | 9,275 | 8,699 | 9,204 | ||
Goodwill | 22,479 | 19,568 | 22,344 | ||
Intangible assets, net | 10,244 | 8,888 | 10,329 | ||
Other assets | 804 | 693 | 806 | ||
Total assets | $ 107,904 | $ 99,157 | $ 105,095 | ||
Liabilities and Stockholders' Equity | |||||
Current liabilities: | |||||
Short-term debt | $ 3,503 | $ 38 | $ 4,464 | ||
Accounts payable | 14,373 | 14,696 | 11,491 | ||
Accrued salaries and related expenses | 2,237 | 2,180 | 2,529 | ||
Current installments of long-term debt | 5,178 | 4,885 | 4,967 | ||
Current operating lease liabilities | 1,484 | 1,311 | 1,418 | ||
Other current liabilities | 8,805 | 8,479 | 7,555 | ||
Total current liabilities | 35,580 | 31,589 | 32,424 | ||
Long-term debt, excluding current installments | 44,828 | 47,343 | 46,341 | ||
Long-term operating lease liabilities | 8,164 | 7,714 | 8,160 | ||
Other long-term liabilities | 5,458 | 4,556 | 5,357 | ||
Total liabilities | 94,030 | 91,202 | 92,282 | ||
Total stockholders' equity | 13,874 | 7,955 | 12,813 | ||
Total liabilities and stockholders' equity | $ 107,904 | $ 99,157 | $ 105,095 | ||
THE HOME DEPOT, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||
Three Months Ended | |||
in millions | May 3, | May 4, | |
Cash Flows from Operating Activities: | |||
Net earnings | $ 3,289 | $ 3,433 | |
Reconciliation of net earnings to net cash provided by operating activities: | |||
Depreciation and amortization, excluding amortization of intangible assets | 910 | 855 | |
Intangible asset amortization | 171 | 139 | |
Stock-based compensation expense | 178 | 170 | |
Changes in working capital | 1,337 | (244) | |
Changes in deferred income taxes | 65 | (3) | |
Other operating activities | 82 | (25) | |
Net cash provided by operating activities | 6,032 | 4,325 | |
Cash Flows from Investing Activities: | |||
Capital expenditures | (844) | (806) | |
Payments for businesses acquired, net | (286) | (156) | |
Other investing activities | 21 | 31 | |
Net cash used in investing activities | (1,109) | (931) | |
Cash Flows from Financing Activities: | |||
Repayments of short-term debt, net | (961) | (278) | |
Proceeds from long-term debt, net of discounts | 69 | 29 | |
Repayments of long-term debt | (1,425) | (1,106) | |
Proceeds from sales of common stock | 33 | 11 | |
Cash dividends | (2,320) | (2,286) | |
Other financing activities | (109) | (126) | |
Net cash used in financing activities | (4,713) | (3,756) | |
Change in cash and cash equivalents | 210 | (362) | |
Effect of exchange rate changes on cash and cash equivalents | 2 | 72 | |
Cash and cash equivalents at beginning of period | 1,389 | 1,659 | |
Cash and cash equivalents at end of period | $ 1,601 | $ 1,369 | |
NON-GAAP FINANCIAL MEASURES
Adjusted operating income, adjusted operating margin, and adjusted diluted earnings per share are presented as supplemental financial measures in the evaluation of our business that are not required by or presented in accordance with GAAP. The Company excludes the impact of amortization expense from acquired intangible assets from adjusted operating income and adjusted operating margin, and the impact of amortization expense from acquired intangible assets, including the related tax effects, from adjusted diluted earnings per share. We do not adjust for the revenue that is generated in part from the use of our acquired intangible assets. Amortization expense, unlike the related revenue, is not affected by operations in any particular period unless an intangible asset becomes impaired, or the useful life of an intangible asset is revised.
When used in conjunction with our GAAP results, we believe these non-GAAP measures provide investors with meaningful supplemental measures of our performance period to period, make it easier for investors to compare our underlying business performance to peers, and align to how management analyzes trends and evaluates performance internally. The Company provides non-GAAP financial information on this basis to facilitate comparability when we report earnings results. These non-GAAP measures should not be considered in isolation or as a substitute for their comparable GAAP financial measures. Investors should rely primarily on our GAAP results and use non-GAAP financial measures only supplementally in making investment decisions. Our calculation of non-GAAP measures may not be comparable to similarly titled measures reported by other companies and other companies may not define these non-GAAP financial measures in the same way, which may limit their usefulness as comparative measures.
RECONCILIATION OF ADJUSTED OPERATING INCOME AND ADJUSTED OPERATING MARGIN | |||||
Three Months Ended | |||||
USD in millions | May 3, | May 4, | % Change | ||
Operating income (GAAP) | $ 4,981 | $ 5,133 | (3.0) % | ||
Operating margin (1) | 11.9 % | 12.9 % | |||
Acquired intangible asset amortization (2) | 171 | 139 | |||
Adjusted operating income (Non-GAAP) | $ 5,152 | $ 5,272 | (2.3) % | ||
Adjusted operating margin (Non-GAAP) (3) | 12.3 % | 13.2 % | |||
(1) | Operating margin is calculated as operating income divided by total net sales. | ||||||||||||||
(2) | Amounts include acquired intangible asset amortization of | ||||||||||||||
(3) | Adjusted operating margin is calculated as adjusted operating income divided by total net sales. | ||||||||||||||
Our adjusted operating margin guidance for fiscal 2026 excludes an expected approximately 40 basis point impact from acquired intangible asset amortization.
RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE | |||||
Three Months Ended | |||||
per share amounts | May 3, | May 4, | % Change | ||
Diluted earnings per share (GAAP) | $ 3.30 | $ 3.45 | (4.3) % | ||
Impact of acquired intangible asset amortization | 0.17 | 0.14 | |||
Income tax impact of non-GAAP adjustment (1) | (0.04) | (0.03) | |||
Adjusted diluted earnings per share (Non-GAAP) | $ 3.43 | $ 3.56 | (3.7) % | ||
(1) | Calculated as the per share impact of acquired intangible asset amortization multiplied by the Company's effective tax rate for the period. | |||||||||||
Our adjusted diluted earnings per share guidance for fiscal 2026 excludes an expected after-tax impact of approximately
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SOURCE The Home Depot