Home Depot (NYSE: HD) beats Q2 expectations and reaffirms 2026 outlook
Rhea-AI Filing Summary
The Home Depot, Inc. reported second quarter fiscal 2026 net sales of $47.9 billion, up 5.7% from the same period in 2025. Comparable sales increased 1.7%, including 1.3% growth in the U.S. Net earnings were $4.8 billion, with diluted earnings per share of $4.79 versus $4.58 a year earlier. Adjusted diluted EPS was $4.92, compared with $4.68 in the prior-year quarter.
For the first six months of fiscal 2026, net sales reached $89.6 billion, up 5.3%, and net earnings were $8.1 billion. Operating cash flow was $11.4 billion. Management stated that second quarter results exceeded expectations and reaffirmed fiscal 2026 guidance, including total sales growth of approximately 2.5% to 4.5%, comparable sales growth of about flat to 2.0%, adjusted operating margin of about 12.8% to 13.0%, and adjusted diluted EPS growth of about flat to 4.0% from fiscal 2025.
Positive
- None.
Negative
- None.
Filing Explained
Quarter-end cash was $2,085 million against disclosed debt balances, while adjusted metrics remain supplemental to GAAP results.
As a Form 8-K, the
The release presents GAAP earnings alongside adjusted operating income, operating margin, and diluted EPS. It defines the adjusted measures as excluding acquired-intangible amortization, including related tax effects for adjusted EPS, and says they supplement rather than replace GAAP results.
At
The reaffirmed fiscal 2026 guidance includes IEEPA tariff refunds, which the company expects to partially offset unplanned fuel, energy, and other product-input costs during the fiscal year.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Net sales Q2 2026: $47,861 million
Net earnings Q2 2026: $4,766 million
Diluted EPS Q2 2026: $4.79
+5 more
8 metrics
Net sales Q2 2026
$47,861 million
Three months ended August 2, 2026; 5.7% increase vs. Q2 2025
Net earnings Q2 2026
$4,766 million
Three months ended August 2, 2026; 4.7% increase vs. Q2 2025
Diluted EPS Q2 2026
$4.79
Three months ended August 2, 2026; up from $4.58 in Q2 2025
Adjusted diluted EPS Q2 2026
$4.92
Non-GAAP; three months ended August 2, 2026; up from $4.68
Comparable sales growth Q2 2026
1.7%
Company-wide comparable sales change vs. Q2 2025
Operating cash flow H1 2026
$11,422 million
Net cash provided by operating activities for six months ended August 2, 2026
Total assets
$109,384 million
Balance sheet as of August 2, 2026
Fiscal 2026 total sales growth guidance
2.5% to 4.5%
Reaffirmed full-year outlook for total sales growth vs. fiscal 2025
Key Terms
comparable sales, adjusted diluted earnings per share, operating margin, IEEPA tariff refunds, +1 more
5 terms
comparable sales financial
"Comparable sales for the second quarter of fiscal 2026 increased 1.7%"
"Comparable sales" are the total sales from stores or products that have been open for a certain period, usually the same time last year or last quarter. They help show whether a business is growing by comparing similar locations or products over time, much like checking if your favorite store's sales are going up compared to previous years.
operating margin financial
"Operating margin is calculated as operating income divided by total net sales"
Operating margin shows how much profit a company makes from its core business activities after paying for costs like wages and materials. It’s useful because it tells you how efficiently a company is running—higher margins mean it keeps more money from each dollar of sales, which can indicate better management or stronger products.
IEEPA tariff refunds financial
"Guidance includes IEEPA tariff refunds, which are expected to partially offset"
Refunds under the International Emergency Economic Powers Act (IEEPA) are repayments of import duties, fees, or penalties that were charged because of trade restrictions or sanctions put in place under emergency authority and later reversed, modified, or found inapplicable. For investors, these refunds can change a company’s past cash outflows and future cost structure—similar to getting a billed charge returned after a rule change—affecting reported earnings or cash available for other uses.
non-GAAP financial measures financial
"Adjusted operating income, adjusted operating margin, and adjusted diluted earnings per share are non-GAAP financial measures"
Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.
Earnings Snapshot
Net sales: $47,861 million · Guidance included
quarter ended August 2, 2026
Net sales
$47,861 million
5.7% increase vs. Q2 2025
Net earnings
$4,766 million
4.7% increase vs. Q2 2025
Diluted EPS (GAAP)
$4.79
4.6% increase vs. $4.58 in Q2 2025
Adjusted diluted EPS (Non-GAAP)
$4.92
5.1% increase vs. $4.68 in Q2 2025
Comparable sales
1.7%
Company-wide comparable sales growth vs. prior-year quarter
Guidance
Reaffirmed fiscal 2026 guidance: total sales growth approximately 2.5% to 4.5%; comparable sales growth approximately flat to 2.0%; about 15 new stores; gross margin about 33.1%; operating margin about 12.4% to 12.6%; adjusted operating margin about 12.8% to 13.0%; adjusted diluted EPS growth approximately flat to 4.0% from $14.69 in fiscal 2025.
FAQ
How did The Home Depot (HD) perform in its second quarter of fiscal 2026?
The Home Depot delivered Q2 2026 net sales of $47.9 billion, up 5.7% year over year, and net earnings of $4.8 billion. Comparable sales rose 1.7%, while diluted EPS increased to $4.79 from $4.58 in Q2 2025.
What were The Home Depot (HD) comparable sales trends in Q2 2026?
In Q2 2026, The Home Depot’s comparable sales increased 1.7%, with U.S. comps up 1.3%. The company reported a 2.8% increase in average ticket and a 1.0% decline in comparable customer transactions, showing growth driven more by ticket size than traffic.
What fiscal 2026 guidance did The Home Depot (HD) reaffirm?
The Home Depot reaffirmed fiscal 2026 guidance for total sales growth of about 2.5% to 4.5% and comparable sales growth of about flat to 2.0%. It also targets adjusted operating margin of 12.8% to 13.0% and adjusted diluted EPS growth of about flat to 4.0% from 2025.
What were The Home Depot (HD) key cash flow figures for the first half of 2026?
For the first six months of fiscal 2026, The Home Depot generated net cash from operating activities of $11.4 billion, compared with $9.0 billion in the prior year. Net cash used in investing activities was $3.0 billion, and net cash used in financing activities totaled $7.7 billion.
What is The Home Depot’s (HD) financial position as of August 2, 2026?
As of August 2, 2026, The Home Depot reported total assets of $109.4 billion and total liabilities of $92.8 billion, resulting in stockholders’ equity of $16.6 billion. Long-term debt, excluding current installments, stood at $44.0 billion.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM 8-K
__________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 18, 2026
__________________
THE HOME DEPOT, INC.
(Exact Name of Registrant as Specified in Charter)
__________________
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of Principal Executive Offices) (Zip Code)
(770 ) 433-8211
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
__________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On August 18, 2026, The Home Depot, Inc. (the “Company”) issued a press release, attached as Exhibit 99.1 and incorporated herein by reference, announcing the Company’s financial results for the fiscal quarter ended August 2, 2026.
The information contained in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18. Furthermore, the information contained in this Item 2.02 and Exhibit 99.1 shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit | Description | |||||||
99.1 | Press Release of The Home Depot, Inc. | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) | |||||||
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE HOME DEPOT, INC. | ||||||||
| By: | /s/ Richard V. McPhail | |||||||
| Name: | Richard V. McPhail | |||||||
| Title: | Executive Vice President and Chief Financial Officer | |||||||
Date: August 18, 2026
3
Exhibit 99.1
The Home Depot Announces Second Quarter Fiscal 2026 Results;
Reaffirms Fiscal 2026 Guidance
ATLANTA, August 18, 2026 -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $47.9 billion for the second quarter of fiscal 2026, an increase of $2.6 billion, or 5.7% from the second quarter of fiscal 2025. Comparable sales for the second quarter of fiscal 2026 increased 1.7%, and comparable sales in the U.S. increased 1.3%.
Net earnings for the second quarter of fiscal 2026 were $4.8 billion, or $4.79 per diluted share, compared with net earnings of $4.6 billion, or $4.58 per diluted share, in the same period of fiscal 2025.
Adjusted(1) diluted earnings per share for the second quarter of fiscal 2026 were $4.92, compared with adjusted diluted earnings per share of $4.68 in the same period of fiscal 2025.
“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% to 4.5%
•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% to 12.6%
•Adjusted(1) operating margin of approximately 12.8% to 13.0%
•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 in fiscal 2025
(1) The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). As used in this earnings release, adjusted operating income, adjusted operating margin, and adjusted diluted earnings per share are non-GAAP financial measures. Refer to the end of this release for an explanation of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures.
•Adjusted(1) diluted earnings-per-share to grow approximately flat to 4.0% from $14.69 in fiscal 2025
•Capital expenditures of approximately 2.5% of total sales
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 District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. The Company employs over 470,000 associates. The Home Depot's stock is traded on the New York Stock Exchange (NYSE: HD) and is included in the Dow Jones industrial average and Standard & Poor's 500 index.
###
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.
For more information, contact:
| Financial Community | News Media | |||||||
| Isabel Janci | Sara Gorman | |||||||
| Vice President of Investor Relations and Treasurer | Senior Director of Corporate Communications | |||||||
| 770-384-2666 | 770-384-2852 | |||||||
| isabel_janci@homedepot.com | sara_gorman@homedepot.com | |||||||
THE HOME DEPOT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
| in millions, except per share data | August 2, 2026 | August 3, 2025 | % Change | August 2, 2026 | August 3, 2025 | % Change | |||||||||||||||||||||||||||||
| Net sales | $ | 47,861 | $ | 45,277 | 5.7 | % | $ | 89,626 | $ | 85,133 | 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, 2026 | August 3, 2025 | % Change | August 2, 2026 | August 3, 2025 | % Change | |||||||||||||||||||||||||||||
| 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, 2026 | August 3, 2025 | February 1, 2026 | ||||||||||||||
| 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, 2026 | August 3, 2025 | |||||||||
| 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, 2026 | August 3, 2025 | % Change | August 2, 2026 | August 3, 2025 | % Change | |||||||||||||||||||||||||||||
| 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 | % | |||||||||||||||||||||||||||
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(1) Operating margin is calculated as operating income divided by total net sales.
(2) Amounts include acquired intangible asset amortization of $125 million and $244 million during the three and six months ended August 2, 2026, respectively, and $87 million and $174 million during the three and six months ended August 3, 2025, respectively, related to SRS Distribution, Inc., and its subsidiaries.
(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, 2026 | August 3, 2025 | % Change | August 2, 2026 | August 3, 2025 | % Change | |||||||||||||||||||||||||||||
| 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 | % | |||||||||||||||||||||||
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(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 $0.50 from acquired intangible asset amortization.