Home Depot Sales Rise 5.7% as Retailer Reaffirms Full-Year Outlook

Home Depot reported fiscal second-quarter sales of $47.9 billion, up 5.7% from a year earlier, as comparable sales improved and the home-improvement retailer kept its full-year outlook unchanged. Comparable sales rose 1.7% for the quarter, while comparable sales in the United States increased 1.3%.

Net earnings were $4.77 billion, up 4.7% from $4.55 billion a year earlier. Diluted earnings per share rose to $4.79 from $4.58, and adjusted diluted earnings per share increased to $4.92 from $4.68. The quarter showed a firmer sales and profit trend than Home Depot reported in the first quarter, when comparable sales rose only 0.6% and adjusted earnings per share declined year over year.

Comparable sales improved as average ticket offset fewer transactions

Home Depot’s second-quarter earnings release showed that the improvement in comparable sales came with a mixed traffic picture. Comparable customer transactions fell 1.0%, while the comparable average ticket rose 2.8%. Across the business, customer transactions declined 0.8% to 443.2 million, and the average ticket increased 2.8% to $92.50 from $90.01.

That mix indicates that a higher average ticket did more of the work than customer traffic during the quarter. Home Depot said customers were engaged in smaller home-improvement projects, a pattern that has been important for the retailer as it waits for a broader recovery in large remodeling activity. The company did not frame the quarter as a return to a strong housing-driven demand cycle, and the transaction data still showed fewer visits than a year earlier.

The comparable-sales result nonetheless strengthened from the first quarter. Home Depot had reported a 0.6% increase in companywide comparable sales and a 0.4% increase in U.S. comparable sales for fiscal Q1. The second-quarter readings of 1.7% and 1.3%, respectively, therefore represented a sequential improvement in the core same-store measure.

The 5.7% increase in total sales was much larger than the 1.7% comparable-sales gain, so the headline revenue growth should not be read as a same-store demand figure. Home Depot’s full-year planning assumptions have included contributions from acquisitions, new stores and expansion of its SRS distribution network. The company completed SRS’s acquisition of building-products distributor GMS in September 2025, after the comparable quarter a year earlier, which means the acquired business was part of Home Depot’s current-year revenue base but not the prior-year second quarter. Home Depot did not disclose in the earnings release how much of the quarter’s 5.7% sales increase came from GMS or other acquired operations.

Operating profit rose, but margins stayed below last year

Gross profit increased 6.5% to $16.12 billion, slightly faster than sales. Selling, general and administrative expenses rose 8.5% to $8.42 billion, however, and operating income increased 4.3% to $6.84 billion. The reported operating margin was 14.3%, compared with 14.5% in the year-earlier quarter.

On an adjusted basis, operating income was $7.02 billion, up 4.8%, while adjusted operating margin slipped to 14.7% from 14.8%. Home Depot’s non-GAAP adjustments exclude amortization of acquired intangible assets. That amortization was $178 million in the second quarter, up from $139 million a year earlier, with $125 million of the current-quarter amount related to the SRS acquisition.

The bottom line improved at a pace close to the increase in operating profit. Net earnings rose 4.7%, diluted earnings per share increased 4.6%, and adjusted diluted earnings per share rose 5.1%. The adjusted per-share figure removes the acquired-intangible amortization effect and related tax impacts, giving investors another view of operating performance alongside the GAAP result.

For the first six months of fiscal 2026, sales were $89.63 billion, up 5.3% from $85.13 billion a year earlier. Net earnings increased only 0.9% to $8.06 billion, while diluted earnings per share rose 0.7% to $8.09. Adjusted diluted earnings per share increased 1.3% to $8.35. Those half-year figures show that the stronger second-quarter profit growth followed a softer start to the year rather than reflecting the pace of earnings growth throughout the first half.

Full-year guidance stays intact

Home Depot reaffirmed its fiscal 2026 outlook. It continues to expect total sales growth of 2.5% to 4.5% and comparable sales ranging from flat to up 2.0%. The company also still expects to open about 15 new Home Depot stores during the year.

Profitability targets were unchanged as well. Home Depot expects a GAAP operating margin of 12.4% to 12.6% and an adjusted operating margin of 12.8% to 13.0%. It projects both GAAP and adjusted diluted earnings per share to range from flat to up 4% compared with fiscal 2025, when GAAP diluted earnings per share were $14.23 and adjusted diluted earnings per share were $14.69. Capital expenditures are expected to equal about 2.5% of sales.

The company added an important cost assumption to the outlook. Its guidance includes expected refunds related to tariffs imposed under the International Emergency Economic Powers Act, which Home Depot said are expected to partially offset unplanned fuel, energy and other product input costs during the year. The wording matters because the retailer is not assuming those refunds eliminate the cost pressure; it is counting on only a partial offset.

Home Depot ended the quarter with 2,364 retail stores and more than 1,340 SRS locations across the United States, Canada and Mexico. The broader footprint supports total sales growth even when comparable sales are more subdued, making the distinction between consolidated revenue and same-store performance especially relevant when assessing the full-year outlook.

The next scheduled earnings update is Home Depot’s fiscal third-quarter release on November 17, 2026. That report will provide the next check on whether the second-quarter improvement in comparable sales is carrying into the second half and whether the retailer remains within the sales, margin and earnings ranges it reaffirmed in August.