Home Depot beats forecasts as shoppers pivot to smaller projects

Home Depot delivered second-quarter results that exceeded Wall Street expectations, reporting revenue of $47.9 billion and adjusted earnings of $4.79 per share. The figures surpassed the $47.3 billion revenue forecast and the $4.73 earnings prediction, marking a strong performance for the retailer as it navigates a shifting consumer landscape.

Top-line growth accelerated by nearly 6% compared to the previous year, with US same-store sales rising 1.3% against a 0.9% expectation. Global comparable store sales for outlets open at least a year increased by 1.7%, beating the roughly 1% consensus. The company noted that while customer transaction volumes dipped by 1%, the average spend per receipt rose significantly.

Chief Financial Officer Richard McPhail attributed the resilience to broad-based demand for smaller-scale home improvement projects. "We saw broad based demand across the business as customers continued to engage in smaller projects," McPhail stated. This trend reflects a broader market dynamic where demand has shifted from major construction to incremental renovations, particularly in outdoor categories such as live goods, mulch, patio items, and grills.

The leadership team is currently operating under a temporary arrangement, with McPhail and senior executive vice president Ann-Marie Campbell steering the company while Chief Executive Officer Ted Decker takes medical leave. Despite the change in executive structure, the firm maintained its full-year guidance, projecting total sales growth between 2.5% and 4.5% for 2026, with same-store sales expected to remain flat to up 2%.

Following the release of the results, Home Depot shares rose 2% in premarket trading. The positive reaction came against a backdrop of easing inflation data in the United States, which reduced expectations for a September interest rate hike and supported broader equity market sentiment.