Home Depot beats estimates on Q2 revenue as smaller projects drive demand
Net earnings of $4.79 per share outpace predictions, while the company maintains its fiscal 2026 growth guidance amid a challenging housing market.
Home Depot has reported second-quarter revenue of $47.86 billion, surpassing Wall Street expectations of $47.24 billion according to a FactSet survey. The Atlanta-based retailer saw its top line increase from $45.28 billion in the previous year, driven by broad-based demand for smaller home improvement projects. This performance marks a solid quarter for the home improvement giant, even as the broader housing market continues to face headwinds.
Comparable store sales in the United States rose 1.3% during the quarter, while global sales for stores open at least a year increased by 1.7%. Chief Financial Officer Richard McPhail noted that the results exceeded internal expectations, attributing the strength to customers engaging in smaller-scale renovations rather than major construction. Although customer transactions slipped by 1%, the average spend per receipt rose to $92.50 from $90.01 a year earlier.
On the bottom line, Home Depot earned $4.77 billion, or $4.79 per share, for the three months ended August 2. This beat the predicted $4.73 per share and improved upon the $4.58 per share reported a year ago. Excluding one-time items, earnings were recorded at $4.92 per share, further underscoring the company's operational efficiency during the period.
The strong financial results come against a backdrop of a sluggish housing market that has pressured retailers since 2022. Mortgage rates remain elevated compared to historic lows, and existing home sales fell 1.7% in July to a seasonally adjusted annual rate of 4.06 million units, according to the National Association of Realtors. Despite these challenges, median home prices continued to rise, reaching $434,100 in July.
Looking ahead, Home Depot has maintained its fiscal 2026 guidance, forecasting total sales growth of approximately 2.5% to 4.5%. The company also expects comparable sales to be about flat to up 2% for the full year. This steady outlook suggests confidence in the retailer's ability to navigate the current economic environment, relying on consistent consumer demand for maintenance and smaller upgrades.
