Home Depot beats Q1 estimates as DIY strength offsets consumer caution; Nvidia results loom
Adjusted earnings of $3.43 per share top expectations, while revenue rises 5% to $41.8 billion. Market focus shifts to Wednesday’s Nvidia report as a key AI sector bellwether.
Home Depot has reported first-quarter 2026 adjusted earnings of $3.43 per share, surpassing consensus estimates of $3.41, while revenue grew approximately 5% year-on-year to $41.8 billion. The home improvement retailer reaffirmed its full-year outlook, projecting same-store sales growth of flat to 2% and total sales growth of 2.5% to 4.5%. The results underscore continued profitability for the S&P 500 constituent despite a challenging macroeconomic backdrop.
Despite the top-line and bottom-line beats, same-store sales growth of 0.6% slightly missed the Bloomberg consensus estimate of 0.9%. Chief Financial Officer Richard McPhail attributed the resilience in financial performance to sustained demand for small do-it-yourself projects, such as painting and patio work, which he described as a "real source of strength." Conversely, customers continue to defer larger capital projects involving lumber, building materials, millwork, flooring, and lighting due to economic uncertainty and affordability concerns.
McPhail noted that while the average Home Depot customer possesses higher income and housing wealth, they are feeling tangible pressure from rising fuel costs. The executive highlighted a complex mix of consumer dynamics, including the positive impact of tax refunds and income growth, offset by higher mortgage rates and increasing energy prices. Consequently, McPhail stated it remains too early to determine whether the company will trend toward the lower or higher end of its guidance range.
Market attention is now shifting toward Nvidia’s quarterly results scheduled for Wednesday, widely viewed as a critical indicator for the artificial intelligence sector. The chipmaker faces intensifying competition from rivals such as Cerebras and AMD, as well as from its own customers including Amazon and Google. Nvidia’s report comes amid a broader earnings season where semiconductor companies have underscored the AI boom as a primary market driver, even as Treasury yield gains pose risks to growth stock valuations.
The Home Depot report is part of a dense week of corporate disclosures that will provide further insight into US consumer spending and housing market activity. Other retailers reporting this week include TJX Companies, Lowe’s, Target, and Walmart. Amazon recently reported strong fourth-quarter fiscal 2025 results, with revenue increasing 12% year-on-year to $213.4 billion and operating income of $25 billion, contributing to a 31.9% share price rise over the past month.
