Key Takeaways
- The home improvement giant reported Q1 adjusted earnings per share of $3.43, narrowly exceeding the Street’s $3.41 forecast but declining from $3.56 in the prior-year quarter
- Total revenue reached $41.77 billion, marking a 4.8% increase compared to last year and surpassing the $41.59 billion consensus estimate
- Comparable store sales increased 0.6% overall, while U.S. comp sales grew 0.4%; the average transaction value rose 2.3% to $92.76
- Management maintained its full-year 2026 outlook, projecting comparable sales growth between flat and 2%, with adjusted earnings per share growth of flat to 4%
- HD shares have declined over 12% year-to-date in 2026, trailing both Lowe’s performance and the broader S&P 500 index
Home Depot (HD) shares advanced 0.7% during premarket hours on Tuesday following the release of first-quarter financial results that outperformed Wall Street’s projections.
The retailer’s adjusted earnings per share reached $3.43, marginally higher than the analyst consensus of $3.41. This represents a decrease from the $3.56 recorded during the corresponding quarter last year. Total revenue climbed 4.8% to $41.77 billion, exceeding the anticipated $41.59 billion.
Net earnings for the three-month period decreased 4.2% to $3.29 billion, down from $3.43 billion in the year-ago quarter. Diluted earnings per share registered at $3.30, compared to $3.45 in Q1 2025.
Comparable store sales showed a 0.6% gain overall, while U.S. comparable sales climbed 0.4%. Transaction counts dropped 1.3%, though the average customer ticket increased 2.3% to reach $92.76.
Chief Executive Ted Decker indicated that demand patterns were “relatively similar” to those observed throughout the entirety of fiscal 2025, while acknowledging that consumer uncertainty and housing affordability challenges continue to present obstacles.
The company reaffirmed its full-year 2026 guidance, projecting total sales growth of 2.5% to 4.5%, comparable sales growth ranging from flat to 2%, and adjusted diluted earnings per share growth of flat to 4% compared to the $14.69 achieved in fiscal 2025.
Major Renovation Projects Remain Delayed
Chief Financial Officer Richard McPhail highlighted ongoing hesitation among property owners to undertake substantial renovation work. “They continue to tell us that they are going to defer their spend on larger projects,” he explained in an interview with CNBC. “That’s consistent with what they’ve told us the last few years.”
HD stock has slumped more than 12% since the beginning of 2026, underperforming Lowe’s, which has dropped less than 10%, and significantly trailing the S&P 500, which has rallied nearly 8% during the same period.
Oppenheimer analyst Brian Nagel, in commentary published prior to the earnings release, expressed growing concern that “shorter-term macro headwinds may be turning more challenging, as rates shift higher, and confidence wanes.”
Rising inflation reaching three-year peaks combined with stagnant wage growth have postponed any significant sales recovery for companies in the home improvement sector.
Expanding the Professional Customer Base
Professional clientele — including contractors, roofing specialists, and skilled tradespeople — represent approximately half of Home Depot’s total revenue, and the company has been intensifying its focus on this customer segment.
The 2024 purchase of SRS Distribution brought an extensive network serving professionals in roofing, landscaping, and pool maintenance. The subsequent GMS acquisition broadened its presence in specialty building materials.
Last week, SRS completed its acquisition of Mingledorff’s, a wholesale distributor specializing in HVAC equipment, components, and supplies.
McPhail emphasized that the acquisition strategy aims to capture a larger share of the $700 billion professional market.
As of the end of Q1, Home Depot maintained operations across 2,361 retail locations and more than 1,280 SRS facilities, employing over 470,000 individuals.
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