The Home Depot Announces Second Quarter Fiscal 2026 Results; Reaffirms Fiscal 2026 Guidance
Rhea-AI Summary
The Home Depot (NYSE: HD) reported fiscal 2026 second quarter net sales of $47.9 billion, up 5.7% year over year, with comparable sales up 1.7% and U.S. comps up 1.3%. Net earnings were $4.8 billion, and diluted EPS rose to $4.79 from $4.58. Adjusted diluted EPS was $4.92, versus $4.68 a year ago.
GAAP operating income grew to $6.8 billion with an operating margin of 14.3%, while adjusted operating margin was 14.7%. For the first six months, net sales increased 5.3% to $89.6 billion and net earnings were $8.1 billion. Operating cash flow for the six months was $11.4 billion, up from $9.0 billion.
The company reaffirmed its fiscal 2026 guidance, including total sales growth of approximately 2.5%–4.5%, comparable sales growth of approximately flat to 2.0%, about 15 new stores, gross margin of about 33.1%, and adjusted operating margin of approximately 12.8%–13.0%. Diluted and adjusted diluted EPS are both expected to grow approximately flat to 4.0% versus fiscal 2025.
Positive
- Q2 2026 net sales up 5.7% year over year to $47.9 billion
- Q2 2026 comparable sales increased 1.7%, with U.S. comps up 1.3%
- Q2 2026 diluted EPS rose 4.6% to $4.79; adjusted EPS up 5.1% to $4.92
- Six‑month net sales grew 5.3% to $89.6 billion; net earnings up to $8.1 billion
- Operating cash flow for six months increased to $11.4 billion from $9.0 billion
- Fiscal 2026 guidance reaffirmed, including 2.5%–4.5% total sales growth and flat to 4.0% EPS growth
Negative
- GAAP operating margin declined to 14.3% in Q2 2026 from 14.5% a year earlier
- Adjusted operating margin slipped to 14.7% in Q2 2026 from 14.8% in Q2 2025
- Comparable customer transactions decreased 1.0% in Q2 2026; total customer transactions fell 0.8% to 443.2 million
- Selling, general and administrative expenses rose 8.5% in Q2 2026 to $8.4 billion, outpacing sales growth of 5.7%
- Short‑term debt increased to $4.25 billion at August 2, 2026, from zero a year earlier
News Explained
At August 2, 2026, cash was $2,085 million against $4,248 million short-term debt and $43,951 million long-term debt.
The release is a completed fiscal 2026 second-quarter report; at quarter-end on
For existing common holders, this adds a quarter-end view of liquidity and debt obligations to the operating results already disclosed.
In the six months ended
The release's adjusted operating margin and adjusted diluted EPS exclude acquired-intangible amortization, with EPS also excluding related tax effects; these are supplemental non-GAAP measures rather than substitutes for GAAP results. The specific guidance line item to monitor is IEEPA tariff refunds, which the company says are expected to partially offset unplanned fuel, energy, and other product-input costs during fiscal 2026.
Key Figures
Historical Context
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Aug 12 | Leadership transition | Negative | -3.1% | CEO temporary medical leave prompted interim executive oversight arrangements. |
| Aug 04 | Earnings call notice | Neutral | +2.4% | Company scheduled its second-quarter earnings conference call for August 18. |
| Jul 30 | Organizational realignment | Neutral | -0.4% | Leadership portfolios were unified across merchandising, finance, Pro and technology. |
| Jul 15 | Product collection launch | Positive | +1.1% | The 2026 Halloween collection launched online with expanded interactive merchandise. |
| Jul 08 | Delivery partnership expansion | Positive | -2.6% | Tax-free delivery expanded to overseas military families through exchange partnerships. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
HD's recent news reactions were mostly divergent from the stated sentiment, with four of five events classified as divergence.
Key Terms
comparable sales financial
ieepa regulatory
non-gaap financial measures financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Net earnings for the second quarter of fiscal 2026 were
Adjusted(1) diluted earnings per share for the second quarter of fiscal 2026 were
"Our second quarter results exceeded our expectations. We saw broad based demand across the business as customers continued to engage in smaller projects," said Richard McPhail, Executive Vice President and Chief Financial Officer.
"This quarter's results were a testament to our investments across the business and our associates' focus on customer service. Our teams did an exceptional job executing throughout a dynamic environment, and I would like to thank them for their continued hard work and dedication," said Ann-Marie Campbell, Senior Executive Vice President.
Fiscal 2026 Guidance
The Company reaffirms its fiscal 2026 guidance. Guidance includes IEEPA tariff refunds, which are expected to partially offset unplanned fuel, energy, and other product input costs throughout the fiscal year.
- 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 second quarter, the company operated a total of 2,364 retail stores and over 1,340 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 timing and expected impact of organizational changes, including within the Company's senior leadership team; 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.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
in millions, except per share data | August 2, | August 3, | % | August 2, | August 3, | % | |||||
Net sales | 5.7 % | 5.3 % | |||||||||
Cost of sales | 31,746 | 30,152 | 5.3 | 59,730 | 56,549 | 5.6 | |||||
Gross profit | 16,115 | 15,125 | 6.5 | 29,896 | 28,584 | 4.6 | |||||
Operating expenses: | |||||||||||
Selling, general and administrative | 8,424 | 7,764 | 8.5 | 16,383 | 15,294 | 7.1 | |||||
Depreciation and amortization | 852 | 806 | 5.7 | 1,693 | 1,602 | 5.7 | |||||
Total operating expenses | 9,276 | 8,570 | 8.2 | 18,076 | 16,896 | 7.0 | |||||
Operating income | 6,839 | 6,555 | 4.3 | 11,820 | 11,688 | 1.1 | |||||
Interest and other (income) expense: | |||||||||||
Interest income and other, net | (59) | (25) | N/M | (66) | (49) | 34.7 | |||||
Interest expense | 583 | 575 | 1.4 | 1,194 | 1,190 | 0.3 | |||||
Interest and other, net | 524 | 550 | (4.7) | 1,128 | 1,141 | (1.1) | |||||
Earnings before provision for income taxes | 6,315 | 6,005 | 5.2 | 10,692 | 10,547 | 1.4 | |||||
Provision for income taxes | 1,549 | 1,454 | 6.5 | 2,637 | 2,563 | 2.9 | |||||
Net earnings | $ 4,766 | $ 4,551 | 4.7 % | $ 8,055 | $ 7,984 | 0.9 % | |||||
Basic weighted average common shares | 994 | 992 | 0.2 % | 994 | 992 | 0.2 % | |||||
Basic earnings per share | $ 4.79 | $ 4.59 | 4.4 | $ 8.10 | $ 8.05 | 0.6 | |||||
Diluted weighted average common shares | 996 | 994 | 0.2 % | 996 | 994 | 0.2 % | |||||
Diluted earnings per share | $ 4.79 | $ 4.58 | 4.6 | $ 8.09 | $ 8.03 | 0.7 | |||||
Three Months Ended | Six Months Ended | ||||||||||
Selected sales data: | August 2, | August 3, | % | August 2, | August 3, | % | |||||
Comparable sales (% change) | 1.7 % | 1.0 % | N/A | 1.2 % | 0.4 % | N/A | |||||
Comparable customer transactions (% change) (1) | (1.0) % | (0.4) % | N/A | (1.2) % | (0.5) % | N/A | |||||
Comparable average ticket (% change) (1) | 2.8 % | 1.4 % | N/A | 2.5 % | 0.7 % | N/A | |||||
Customer transactions (in millions) (1) | 443.2 | 446.8 | (0.8) % | 834.3 | 841.6 | (0.9) % | |||||
Average ticket (1) | $ 92.50 | $ 90.01 | 2.8 | $ 92.62 | $ 90.34 | 2.5 | |||||
(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 | August 2, | August 3, | February 1, | ||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ 2,085 | $ 2,804 | $ 1,389 | ||
Receivables, net | 6,963 | 5,878 | 5,597 | ||
Merchandise inventories | 26,847 | 24,843 | 25,817 | ||
Other current assets | 1,825 | 1,866 | 1,588 | ||
Total current assets | 37,720 | 35,391 | 34,391 | ||
Net property and equipment | 28,147 | 26,896 | 28,021 | ||
Operating lease right-of-use assets | 9,300 | 8,662 | 9,204 | ||
Goodwill | 22,899 | 19,619 | 22,344 | ||
Intangible assets, net | 10,482 | 8,770 | 10,329 | ||
Other assets | 836 | 711 | 806 | ||
Total assets | $ 109,384 | $ 100,049 | $ 105,095 | ||
Liabilities and Stockholders' Equity | |||||
Current liabilities: | |||||
Short-term debt | $ 4,248 | $ — | $ 4,464 | ||
Accounts payable | 13,585 | 13,086 | 11,491 | ||
Accrued salaries and related expenses | 2,471 | 2,385 | 2,529 | ||
Current installments of long-term debt | 4,697 | 6,400 | 4,967 | ||
Current operating lease liabilities | 1,516 | 1,336 | 1,418 | ||
Other current liabilities | 8,471 | 7,639 | 7,555 | ||
Total current liabilities | 34,988 | 30,846 | 32,424 | ||
Long-term debt, excluding current installments | 43,951 | 45,917 | 46,341 | ||
Long-term operating lease liabilities | 8,155 | 7,668 | 8,160 | ||
Other long-term liabilities | 5,673 | 4,953 | 5,357 | ||
Total liabilities | 92,767 | 89,384 | 92,282 | ||
Total stockholders' equity | 16,617 | 10,665 | 12,813 | ||
Total liabilities and stockholders' equity | $ 109,384 | $ 100,049 | $ 105,095 | ||
THE HOME DEPOT, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||
Six Months Ended | |||
in millions | August 2, | August 3, | |
Cash Flows from Operating Activities: | |||
Net earnings | $ 8,055 | $ 7,984 | |
Reconciliation of net earnings to net cash provided by operating activities: | |||
Depreciation and amortization, excluding amortization of intangible assets | 1,839 | 1,720 | |
Intangible asset amortization | 349 | 278 | |
Stock-based compensation expense | 326 | 288 | |
Changes in working capital | 570 | (1,821) | |
Changes in deferred income taxes | 58 | 490 | |
Other operating activities | 225 | 29 | |
Net cash provided by operating activities | 11,422 | 8,968 | |
Cash Flows from Investing Activities: | |||
Capital expenditures | (1,724) | (1,723) | |
Payments for businesses acquired, net | (1,333) | (233) | |
Other investing activities | 46 | 64 | |
Net cash used in investing activities | (3,011) | (1,892) | |
Cash Flows from Financing Activities: | |||
Repayments of short-term debt, net | (216) | (316) | |
Proceeds from long-term debt | 122 | 76 | |
Repayments of long-term debt | (3,040) | (1,199) | |
Proceeds from sales of common stock | 192 | 163 | |
Cash dividends | (4,643) | (4,574) | |
Other financing activities | (116) | (130) | |
Net cash used in financing activities | (7,701) | (5,980) | |
Change in cash and cash equivalents | 710 | 1,096 | |
Effect of exchange rate changes on cash and cash equivalents | (14) | 49 | |
Cash and cash equivalents at beginning of period | 1,389 | 1,659 | |
Cash and cash equivalents at end of period | $ 2,085 | $ 2,804 | |
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 | Six Months Ended | ||||||||||
USD in millions | August 2, | August 3, | % | August 2, | August 3, | % | |||||
Operating income (GAAP) | $ 6,839 | $ 6,555 | 4.3 % | $ 11,820 | $ 11,688 | 1.1 % | |||||
Operating margin (1) | 14.3 % | 14.5 % | 13.2 % | 13.7 % | |||||||
Acquired intangible asset amortization (2) | 178 | 139 | 349 | 278 | |||||||
Adjusted operating income (Non-GAAP) | $ 7,017 | $ 6,694 | 4.8 % | $ 12,169 | $ 11,966 | 1.7 % | |||||
Adjusted operating margin (Non-GAAP) (3) | 14.7 % | 14.8 % | 13.6 % | 14.1 % | |||||||
(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 | Six Months Ended | ||||||||||
per share amounts | August 2, | August 3, | % | August 2, | August 3, | % | |||||
Diluted earnings per share (GAAP) | $ 4.79 | $ 4.58 | 4.6 % | $ 8.09 | $ 8.03 | 0.7 % | |||||
Impact of acquired intangible asset amortization | 0.18 | 0.14 | 0.35 | 0.28 | |||||||
Income tax impact of non-GAAP adjustment (1) | (0.05) | (0.04) | (0.09) | (0.07) | |||||||
Adjusted diluted earnings per share (Non-GAAP) | $ 4.92 | $ 4.68 | 5.1 % | $ 8.35 | $ 8.24 | 1.3 % | |||||
(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