Home Depot beats earnings, reaffirms outlook

Home Depot reported first-quarter fiscal 2026 sales of $41.8 billion on Tuesday, up 4.8% from a year earlier, and reaffirmed its full-year outlook. Comparable sales rose 0.6%, with U.S. comparable sales up 0.4%, according to the company’s earnings release. Adjusted diluted earnings per share were $3.43, compared with $3.56 a year earlier, while net earnings were $3.3 billion, down from $3.4 billion. The company kept its fiscal 2026 forecast for total sales growth of about 2.5% to 4.5% and comparable sales growth of roughly flat to 2.0%. Home Depot also maintained guidance for about 15 new stores and adjusted diluted earnings-per-share growth of approximately flat to 4.0% from fiscal 2025. ### Why did Home Depot hold its outlook even with consumers under pressure? (ir.homedepot.com) Ted Decker, Home Depot’s chair, president and chief executive, said first-quarter demand looked much like fiscal 2025 despite “greater consumer uncertainty and housing affordability pressure.” The company’s decision to reaffirm guidance indicates management did not see a material change in the demand backdrop described in its prior outlook. (ir.homedepot.com) Richard McPhail, the company’s chief financial officer, told Yahoo Finance that homeowners were still spending on smaller, do-it-yourself projects even as worries about fuel costs and affordability persisted. He said Home Depot’s customer base tends to have higher incomes and housing wealth, but that customers were still feeling the effect of rising fuel costs. (ir.homedepot.com) ### Which purchases are still selling, and which ones are being delayed? McPhail said categories tied to smaller in-home projects, including paint and patio, remained “a real source of strength” for Home Depot. He described that pattern as consistent with the past few years, with customers continuing to spend on lower-ticket projects they can complete without committing to a major renovation. (finance.yahoo.com) The same Yahoo Finance interview said categories linked to larger projects were weaker. McPhail named lumber, building materials, millwork, flooring and lighting as areas where customers continued to defer purchases because of economic uncertainty and affordability concerns. (finance.yahoo.com) ### How strong were the quarter’s headline numbers? Home Depot said foreign exchange added about 55 basis points to total company comparable sales in the quarter. The company reported adjusted diluted earnings per share of $3.43, above the $3.41 analyst expectation cited by Yahoo Finance, while revenue of $41.8 billion was above the consensus cited there. (finance.yahoo.com) At the end of the quarter, Home Depot operated 2,361 retail stores and more than 1,280 SRS locations across the United States, Canada and Mexico, the earnings release said. The company added that capital expenditures are expected to be about 2.5% of total sales for the year. ### What does management say about the demand backdrop now? (ir.homedepot.com) Decker said underlying demand in the business was “relatively similar” to what Home Depot saw through fiscal 2025. That comment, together with McPhail’s description of steady smaller-project demand and softer large-project categories, outlined the company’s current view of the home-improvement market. (ir.homedepot.com) Yahoo Finance reported that same-store sales growth of 0.6% was below a 0.9% Street expectation compiled by Bloomberg, even as revenue and adjusted earnings topped expectations. That split left investors with a quarter in which overall sales growth held up better than some category trends inside the business. (ir.homedepot.com) ### What comes next for Home Depot this quarter? Home Depot said it would hold a conference call at 9 a.m. ET on May 19 to discuss the quarter and related matters. The company’s investor calendar also lists its annual meeting of shareholders for May 21 and its next earnings release for August 18. (ir.homedepot.com) (finance.yahoo.com)