Key Takeaways
- First-quarter adjusted earnings per share reached $3.43, surpassing Wall Street’s $3.41 forecast, representing a decline from $3.56 in the prior-year quarter
- Total sales reached $41.77 billion, marking a 4.8% increase from last year and exceeding the $41.59 billion consensus estimate
- Comparable store sales increased 0.6%, while U.S. comps grew 0.4%; transaction value averaged $92.76, up 2.3%
- Full-year projections remain unchanged, anticipating comparable sales growth between flat and 2%, with adjusted EPS growth ranging from flat to 4%
- HD stock has declined over 12% year-to-date in 2026, trailing both Lowe’s performance and the broader S&P 500 index
Shares of Home Depot (HD) climbed 0.7% during premarket hours on Tuesday following the release of first-quarter financial results that exceeded analyst projections.
The home improvement giant delivered adjusted earnings per share of $3.43, narrowly beating the Street’s $3.41 consensus. This figure represents a decrease from the $3.56 posted during the corresponding quarter of the previous year. Top-line revenue grew 4.8% to reach $41.77 billion, outpacing analyst expectations of $41.59 billion.
Net profit for the quarter decreased 4.2% to $3.29 billion, down from $3.43 billion in the year-ago period. Diluted earnings per share registered at $3.30, compared to $3.45 in the first quarter of 2025.
Comparable store sales posted a 0.6% gain overall, while domestic comparable sales increased 0.4%. The number of customer transactions declined 1.3%, though this was partially offset by a 2.3% increase in average transaction value to $92.76.
Chief Executive Ted Decker indicated that customer demand levels remained “relatively similar” to patterns observed throughout fiscal year 2025, while emphasizing that consumer uncertainty and housing affordability constraints continue to pose challenges.
The Atlanta-based retailer maintained 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% versus the $14.69 reported for fiscal 2025.
Large-Scale Renovation Projects Remain Sluggish
Chief Financial Officer Richard McPhail highlighted ongoing hesitation among property owners regarding substantial home improvement investments. “They continue to tell us that they are going to defer their spend on larger projects,” he shared with CNBC. “That’s consistent with what they’ve told us the last few years.”
HD stock has dropped more than 12% since the beginning of 2026, underperforming competitor Lowe’s, which has declined less than 10%, and significantly trailing the S&P 500, which has advanced nearly 8% during the same timeframe.
Oppenheimer equity analyst Brian Nagel, in commentary released prior to the earnings announcement, expressed growing apprehension that “shorter-term macro headwinds may be turning more challenging, as rates shift higher, and confidence wanes.”
Elevated inflation reaching three-year peaks combined with stagnant wage growth has extended the timeframe for any substantial sales rebound within the home improvement retail sector.
Professional Customer Segment Remains Strategic Priority
Professional clients—including contractors, roofing specialists, and skilled tradespeople—generate approximately half of Home Depot’s total revenue, and the company has been intensifying its focus on this customer segment.
The company’s 2024 purchase of SRS Distribution brought a comprehensive network catering to roofing, landscaping, and pool service professionals. The subsequent GMS acquisition expanded its presence in specialized building materials.
Most recently, SRS completed the acquisition of Mingledorff’s, a wholesale distributor specializing in HVAC equipment, components, and supplies.
McPhail emphasized that the acquisition approach aims to capture additional share of the approximately $700 billion professional market opportunity.
As of the conclusion of Q1, Home Depot maintained operations across 2,361 retail locations and more than 1,280 SRS distribution centers, employing a workforce exceeding 470,000 individuals.
