Home Depot, Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 18 August 2026: press release. Guidance figures: 13 kept. The quarter’s numbers.

Key takeaways

Sales rose 5.7% to $47.9 billion: Six-month sales were $89.6 billion, up 5.3%. Second-quarter sales were compared with $45.3 billion in the second quarter of fiscal 2025. Source
Comparable sales up 1.7%: Comparable sales rose 1.2% in the first half, against 0.4% a year earlier. U.S. comparable sales rose 1.3% in the quarter. Source
Adjusted diluted EPS rose 5.1%: Adjusted diluted EPS was $4.92, up 5.1%, excluding acquired intangible asset amortization. First-half adjusted diluted EPS was $8.35, up 1.3%. Source
SG&A rose faster than sales: Selling, general and administrative expense rose 8.5% to $8.4 billion in the quarter, against 5.7% sales growth. First-half SG&A rose 7.1%. Source
Full-year guidance reaffirmed: Management reaffirmed every fiscal 2026 guidance item from the first-quarter release; none of the figures changed. Source

“Our second quarter results exceeded our expectations. We saw broad based demand across the business as customers continued to engage in smaller projects,”
Richard McPhail, Executive Vice President and Chief Financial Officer

Guidance

Area	Period	Figure	Against last quarter
Total sales growth Source	fiscal 2026	approximately 2.5% to 4.5%	Kept
Comparable sales growth Source	fiscal 2026	approximately flat to 2.0%	Kept
New stores Source	fiscal 2026	approximately 15	Kept
Gross margin Source	fiscal 2026	approximately 33.1%	Kept
Operating margin Source	fiscal 2026	approximately 12.4% to 12.6%	Kept
Adjusted operating margin Source	fiscal 2026	approximately 12.8% to 13.0%	Kept
Effective tax rate Source	fiscal 2026	approximately 24.3%	Kept
Net interest expense Source	fiscal 2026	approximately $2.3 billion	Kept
Diluted EPS growth Source	fiscal 2026	approximately flat to 4.0% from $14.23 in fiscal 2025	Kept
Adjusted diluted EPS growth Source	fiscal 2026	approximately flat to 4.0% from $14.69 in fiscal 2025	Kept
Capital expenditures Source	fiscal 2026	approximately 2.5% of total sales	Kept
Amortization effect on adjusted operating margin Source	fiscal 2026	approximately 40 basis point impact	Kept
Amortization effect on adjusted diluted EPS Source	fiscal 2026	approximately $0.50 after-tax impact	Kept

What changed from last quarter

Guidance kept: Fiscal 2026 guidance was reaffirmed in this release, with no figure changed from the first-quarter release. Source
New: Guidance now includes IEEPA tariff refunds, expected to partly offset unplanned fuel, energy and other product input costs. The first-quarter release did not mention them. Source

Results and growth drivers

Sales rose 5.7% to $47.9 billion: Six-month sales were $89.6 billion, up 5.3%. Second-quarter sales were compared with $45.3 billion in the second quarter of fiscal 2025. Source
Comparable sales up 1.7%: Comparable sales rose 1.2% in the first half, against 0.4% a year earlier. U.S. comparable sales rose 1.3% in the quarter. Source
Net earnings and GAAP EPS rose: Net earnings were $4.8 billion, or $4.79 per diluted share, up from $4.58 a year earlier. First-half diluted EPS was $8.09, up 0.7%. Source
Adjusted diluted EPS rose 5.1%: Adjusted diluted EPS was $4.92, up 5.1%, excluding acquired intangible asset amortization. First-half adjusted diluted EPS was $8.35, up 1.3%. Source
Associates credited for execution: Campbell said associates executed well in a dynamic environment and thanked them for their continued hard work and dedication. Source

Customer transactions and ticket

Total transaction count declined slightly: Customer transactions totaled 443.2 million in the quarter, down 0.8%, and 834.3 million in the first half, down 0.9%. HD Supply and SRS are excluded. Source
First-half average ticket higher: First-half average ticket was $92.62, against $90.34 a year earlier, up 2.5%. Figures exclude HD Supply and SRS. Source

“This quarter’s results were a testament to our investments across the business and our associates’ focus on customer service.”
Ann-Marie Campbell, Senior Executive Vice President

Stores and regional footprint

Retail stores and SRS locations higher: Retail stores ended the quarter at 2,364 and SRS locations at over 1,340, across the company's footprint. Source
Store count up from first quarter: Retail stores were 2,361 at the end of the first quarter. SRS locations were over 1,280 at that point.
Footprint spans all 50 states: Locations span all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. Source
Associate headcount over 470,000: The company employs over 470,000 associates, the same number given in the first-quarter release. Source

Costs, margins and operating income

Gross profit up 6.5%: Gross profit was $16.1 billion, up 6.5% from $15.1 billion. First-half gross profit was $29.9 billion, up 4.6%. Source
SG&A rose faster than sales: Selling, general and administrative expense rose 8.5% to $8.4 billion in the quarter, against 5.7% sales growth. First-half SG&A rose 7.1%. Source
Operating income up 4.3%: Operating income was $6.8 billion, up 4.3%, with operating margin at 14.3% against 14.5% a year earlier. Source
Adjusted operating margin 14.7%: Adjusted operating margin was 14.7%, against 14.8% a year earlier, after excluding acquired intangible asset amortization. Source
Acquired amortization rose with SRS: Acquired intangible asset amortization was $178 million in the quarter, against $139 million. Of this, $125 million related to SRS Distribution, Inc. and its subsidiaries. Source

Cash flow, capital and shareholder returns

Operating cash flow rose to $11.4 billion: First-half operating cash flow was $11.4 billion, against $9.0 billion. Working capital was a $570 million inflow, against a $1.8 billion outflow a year earlier. Source
Capital spending held flat: Capital expenditures were $1.7 billion in the first half, level with the prior-year period. Source
Acquisition payments rose sharply: Payments for businesses acquired, net, were $1.3 billion in the first half, against $233 million a year earlier. The release does not name the businesses. Source
Dividends and debt repayment: First-half cash dividends were $4.6 billion. Long-term debt repayments were $3.0 billion, against $1.2 billion a year earlier. Source
Diluted share count slightly higher: Diluted weighted average shares were 996 million, against 994 million in the prior-year quarter. Source

Balance sheet, inventory and payables

Inventory higher than a year earlier: Merchandise inventories were $26.8 billion, against $24.8 billion a year earlier and $25.8 billion at fiscal year-end. Receivables were $7.0 billion. Source
Accounts payable rose: Accounts payable were $13.6 billion, up from $13.1 billion a year earlier and $11.5 billion at fiscal year-end. Source
Long-term debt lower year on year: Long-term debt, excluding current installments, was $44.0 billion, down from $45.9 billion a year earlier. Short-term debt was $4.2 billion. Source
Goodwill and intangibles higher: Goodwill was $22.9 billion and intangible assets, net, were $10.5 billion, up from $19.6 billion and $8.8 billion a year earlier. Source
Stockholders' equity rose: Total stockholders' equity was $16.6 billion, against $10.7 billion a year earlier. The release does not give a cause for the change. Source

Fiscal 2026 guidance

Full-year guidance reaffirmed: Management reaffirmed every fiscal 2026 guidance item from the first-quarter release; none of the figures changed. Source
Tariff refunds now included: Guidance now takes account of IEEPA tariff refunds, expected to offset part of unplanned fuel, energy and product input costs through the year. Source
Adjusted guidance excludes amortization: Adjusted operating margin guidance excludes about 40 basis points of acquired intangible amortization. Adjusted EPS guidance excludes about $0.50 after tax. Source

Figures management reported

Figure	Reported
Comparable sales Source	1.7% in the quarter
Average ticket Source	$92.50
Merchandise inventories Source	$26.8 billion
Retail store count Source	2,364
Comparable customer transactions (traffic) Source	(1.0)% in the quarter

Risks management discussed

External: Unplanned fuel, energy and other product input costs are a cost pressure that IEEPA tariff refunds are expected to partly offset during the year. Source

Earlier plans management reported on

Not stated: Management reaffirmed fiscal 2026 guidance in this release. The release does not describe progress against the guidance using the terms on track, ahead or delayed. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

The Home Depot Announces Second Quarter Fiscal 2026 Results;

Reaffirms Fiscal 2026 Guidance

ATLANTA, August 18, 2026 -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $47.9 billion for the second quarter of fiscal 2026, an increase of $2.6 billion, or 5.7% from the second quarter of fiscal 2025. Comparable sales for the second quarter of fiscal 2026 increased 1.7%, and comparable sales in the U.S. increased 1.3%.

Net earnings for the second quarter of fiscal 2026 were $4.8 billion, or $4.79 per diluted share, compared with net earnings of $4.6 billion, or $4.58 per diluted share, in the same period of fiscal 2025.

Adjusted diluted earnings per share for the second quarter of fiscal 2026 were $4.92, compared with adjusted diluted earnings per share of $4.68 in the same period of fiscal 2025.

“Our second quarter results exceeded our expectations. We saw broad based demand across the business as customers continued to engage in smaller projects,” said Richard McPhail, Executive Vice President and Chief Financial Officer.

“This quarter’s results were a testament to our investments across the business and our associates’ focus on customer service. Our teams did an exceptional job executing throughout a dynamic environment, and I would like to thank them for their continued hard work and dedication,” said Ann-Marie Campbell, Senior Executive Vice President.

Fiscal 2026 Guidance

The Company reaffirms its fiscal 2026 guidance. Guidance includes IEEPA tariff refunds, which are expected to partially offset unplanned fuel, energy, and other product input costs throughout the fiscal year.

Total sales growth of approximately 2.5% to 4.5%
Comparable sales growth of approximately flat to 2.0%
Approximately 15 new stores
Gross margin of approximately 33.1%
Operating margin of approximately 12.4% to 12.6%
Adjustedoperating margin of approximately 12.8% to 13.0%
Effective tax rate of approximately 24.3%
Net interest expense of approximately $2.3 billion
Diluted earnings-per-share to grow approximately flat to 4.0% from $14.23 in fiscal 2025

(1) The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). As used in this earnings release, adjusted operating income, adjusted operating margin, and adjusted diluted earnings per share are non-GAAP financial measures. Refer to the end of this release for an explanation of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures.

Adjusted diluted earnings-per-share to grow approximately flat to 4.0% from $14.69 in fiscal 2025
Capital expenditures of approximately 2.5% of total sales

The Home Depot will conduct a conference call today at 9 a.m. ET to discuss information included in this news release and related matters. The conference call will be available in its entirety through a webcast and replay at ir.homedepot.com/events-and-presentations.

At the end of the second quarter, the company operated a total of 2,364 retail stores and over 1,340 SRS locations across all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. The Company employs over 470,000 associates. The Home Depot's stock is traded on the New York Stock Exchange (NYSE: HD) and is included in the Dow Jones industrial average and Standard & Poor's 500 index.

Cautionary Note Regarding Forward-Looking Statements

Forward-looking statements notice

Certain statements contained herein constitute "forward-looking statements" under the federal securities laws, including as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events, and use words such as “may,” “will,” “could,” “should,” “would,” “anticipate,” “intend,” “estimate,” “project,” “plan,” “believe,” “expect,” “target,” "prospects,” “potential,” "commit” and "forecast,” or words of similar import or meaning or refer to future time periods. Forward-looking statements may relate to, among other things: our brand and reputation; the demand for our products and services, including as a result of macroeconomic conditions and changing customer preferences and expectations; net sales growth; comparable sales; the effects of competition; implementation of interconnected, store, supply chain, technology, innovation and other strategic initiatives, including with respect to real estate; inventory, on-shelf availability, and in-stock positions; the state of the economy; the state of the housing and home improvement markets; the state of the credit markets, including mortgages, home equity loans, and consumer and trade credit; the impact of tariffs; trade policy changes or restrictions, or international trade disputes and efforts and ability to continue to diversify our supply chain; issues related to the payment methods we accept; demand for credit offerings including trade credit; management of relationships with our associates, jobseekers, suppliers and service providers; cost and availability of labor; costs of fuel and other energy sources; events that could disrupt our business, supply chain, technology infrastructure, or demand for our products and services, such as tariffs, trade policy changes or restrictions or international trade disputes, natural disasters, climate change, public health issues, cybersecurity events, and labor disputes; geopolitical tensions or conflicts, military conflicts, or acts of war; our ability to maintain a safe and secure store environment; our ability to address expectations regarding sustainability and human capital management matters and meet related goals; continuation or suspension of share repurchases; net earnings and margin performance; earnings per share; future dividends; capital allocation and expenditures; productivity; liquidity; return on invested capital; expense and debt leverage; changes in interest rates; changes in foreign currency exchange rates; commodity or other price inflation and deflation; our ability to issue debt on terms and at rates acceptable to us; the impact and expected outcome of investigations, inquiries, claims, and litigation; the timing and expected impact of organizational changes, including within the Company's senior leadership team; the challenges of operating in international markets; the adequacy of insurance coverage; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of legal and regulatory changes, including executive orders and other administrative or legislative actions, such as changes to tax laws and regulations; store openings and closures; financial outlook, including guidance for fiscal 2026; and the impact of acquired companies, including SRS and GMS, on our organization and the ability to recognize the anticipated benefits of completed or pending acquisitions.

Forward-looking statements notice

These statements are not guarantees of future performance and are subject to future events, risks and uncertainties - many of which are beyond our control, dependent on the actions of third parties, or currently unknown to us - as well as potentially inaccurate assumptions that could cause actual results to differ materially from our historical experience and our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Part I, Item 1A. "Risk Factors," and elsewhere in our Annual Report on Form 10-K for our fiscal year ended February 1, 2026 and also as described from time to time in reports subsequently filed with the Securities and Exchange Commission. There also may be other factors that we cannot anticipate or that are not described herein, generally because we do not currently perceive them to be material. Such factors could cause results to differ materially from our expectations. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our filings with the Securities and Exchange Commission and in our other public statements.

Non-GAAP Financial Measures

To provide additional transparency, we supplement our disclosure with certain non-GAAP financial measures. When used in conjunction with our GAAP financial measures, we believe these supplemental non-GAAP financial measures will help management and investors to better understand and analyze our performance. However, this supplemental information should not be considered in isolation or as a substitute for the related GAAP measures. Refer to the end of this release for an explanation and definitions of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures.

For more information, contact:

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

	Three Months Ended				Six Months Ended
in millions, except per share data	August 2, 2026	August 3, 2025	% Change		August 2, 2026	August 3, 2025	% Change
Net sales	$47,861	$45,277	5.7%		$89,626	$85,133	5.3%
Cost of sales	31,746	30,152	5.3		59,730	56,549	5.6
Gross profit	16,115	15,125	6.5		29,896	28,584	4.6
Operating expenses:
Selling, general and administrative	8,424	7,764	8.5		16,383	15,294	7.1
Depreciation and amortization	852	806	5.7		1,693	1,602	5.7
Total operating expenses	9,276	8,570	8.2		18,076	16,896	7.0
Operating income	6,839	6,555	4.3		11,820	11,688	1.1
Interest and other (income) expense:
Interest income and other, net	(59)	(25)		N/M	(66)	(49)	34.7
Interest expense	583	575	1.4		1,194	1,190	0.3
Interest and other, net	524	550	(4.7)		1,128	1,141	(1.1)
Earnings before provision for income taxes	6,315	6,005	5.2		10,692	10,547	1.4
Provision for income taxes	1,549	1,454	6.5		2,637	2,563	2.9
Net earnings	$4,766	$4,551	4.7%		$8,055	$7,984	0.9%
Basic weighted average common shares	994	992	0.2%		994	992	0.2%
Basic earnings per share	$4.79	$4.59	4.4		$8.10	$8.05	0.6
Diluted weighted average common shares	996	994	0.2%		996	994	0.2%
Diluted earnings per share	$4.79	$4.58	4.6		$8.09	$8.03	0.7
	Three Months Ended				Six Months Ended
Selected sales data:	August 2, 2026	August 3, 2025	% Change		August 2, 2026	August 3, 2025	% Change
Comparable sales (% change)	1.7%	1.0%		N/A	1.2%	0.4%		N/A
Comparable customer transactions (% change)	(1.0)%	(0.4)%		N/A	(1.2)%	(0.5)%		N/A
Comparable average ticket (% change)	2.8%	1.4%		N/A	2.5%	0.7%		N/A
Customer transactions (in millions)	443.2	446.8	(0.8)%		834.3	841.6	(0.9)%
Average ticket	$92.50	$90.01	2.8		$92.62	$90.34	2.5

(1)Customer transactions and average ticket measures do not include results from HD Supply or SRS.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

in millions	August 2, 2026	August 3, 2025	February 1, 2026
Assets
Current assets:
Cash and cash equivalents	$2,085	$2,804	$1,389
Receivables, net	6,963	5,878	5,597
Merchandise inventories	26,847	24,843	25,817
Other current assets	1,825	1,866	1,588
Total current assets	37,720	35,391	34,391
Net property and equipment	28,147	26,896	28,021
Operating lease right-of-use assets	9,300	8,662	9,204
Goodwill	22,899	19,619	22,344
Intangible assets, net	10,482	8,770	10,329
Other assets	836	711	806
Total assets	$109,384	$100,049	$105,095
Liabilities and Stockholders' Equity
Current liabilities:
Short-term debt	$4,248	$ -	$4,464
Accounts payable	13,585	13,086	11,491
Accrued salaries and related expenses	2,471	2,385	2,529
Current installments of long-term debt	4,697	6,400	4,967
Current operating lease liabilities	1,516	1,336	1,418
Other current liabilities	8,471	7,639	7,555
Total current liabilities	34,988	30,846	32,424
Long-term debt, excluding current installments	43,951	45,917	46,341
Long-term operating lease liabilities	8,155	7,668	8,160
Other long-term liabilities	5,673	4,953	5,357
Total liabilities	92,767	89,384	92,282
Total stockholders’ equity	16,617	10,665	12,813
Total liabilities and stockholders’ equity	$109,384	$100,049	$105,095

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
in millions	August 2, 2026	August 3, 2025
Cash Flows from Operating Activities:
Net earnings	$8,055	$7,984
Reconciliation of net earnings to net cash provided by operating activities:
Depreciation and amortization, excluding amortization of intangible assets	1,839	1,720
Intangible asset amortization	349	278
Stock-based compensation expense	326	288
Changes in working capital	570	(1,821)
Changes in deferred income taxes	58	490
Other operating activities	225	29
Net cash provided by operating activities	11,422	8,968
Cash Flows from Investing Activities:
Capital expenditures	(1,724)	(1,723)
Payments for businesses acquired, net	(1,333)	(233)
Other investing activities	46	64
Net cash used in investing activities	(3,011)	(1,892)
Cash Flows from Financing Activities:
Repayments of short-term debt, net	(216)	(316)
Proceeds from long-term debt	122	76
Repayments of long-term debt	(3,040)	(1,199)
Proceeds from sales of common stock	192	163
Cash dividends	(4,643)	(4,574)
Other financing activities	(116)	(130)
Net cash used in financing activities	(7,701)	(5,980)
Change in cash and cash equivalents	710	1,096
Effect of exchange rate changes on cash and cash equivalents	(14)	49
Cash and cash equivalents at beginning of period	1,389	1,659
Cash and cash equivalents at end of period	$2,085	$2,804

NON-GAAP FINANCIAL MEASURES

Adjusted operating income, adjusted operating margin, and adjusted diluted earnings per share are presented as supplemental financial measures in the evaluation of our business that are not required by or presented in accordance with GAAP. The Company excludes the impact of amortization expense from acquired intangible assets from adjusted operating income and adjusted operating margin, and the impact of amortization expense from acquired intangible assets, including the related tax effects, from adjusted diluted earnings per share. We do not adjust for the revenue that is generated in part from the use of our acquired intangible assets. Amortization expense, unlike the related revenue, is not affected by operations in any particular period unless an intangible asset becomes impaired, or the useful life of an intangible asset is revised.

When used in conjunction with our GAAP results, we believe these non-GAAP measures provide investors with meaningful supplemental measures of our performance period to period, make it easier for investors to compare our underlying business performance to peers, and align to how management analyzes trends and evaluates performance internally. The Company provides non-GAAP financial information on this basis to facilitate comparability when we report earnings results. These non-GAAP measures should not be considered in isolation or as a substitute for their comparable GAAP financial measures. Investors should rely primarily on our GAAP results and use non-GAAP financial measures only supplementally in making investment decisions. Our calculation of non-GAAP measures may not be comparable to similarly titled measures reported by other companies and other companies may not define these non-GAAP financial measures in the same way, which may limit their usefulness as comparative measures.

RECONCILIATION OF ADJUSTED OPERATING INCOME AND ADJUSTED OPERATING MARGIN

	Three Months Ended			Six Months Ended
USD in millions	August 2, 2026	August 3, 2025	% Change	August 2, 2026	August 3, 2025	% Change
Operating income (GAAP)	$6,839	$6,555	4.3%	$11,820	$11,688	1.1%
Operating margin	14.3%	14.5%		13.2%	13.7%
Acquired intangible asset amortization	178	139		349	278
Adjusted operating income (Non-GAAP)	$7,017	$6,694	4.8%	$12,169	$11,966	1.7%
Adjusted operating margin (Non-GAAP)	14.7%	14.8%		13.6%	14.1%

(1) Operating margin is calculated as operating income divided by total net sales.

(2) Amounts include acquired intangible asset amortization of $125 million and $244 million during the three and six months ended August 2, 2026, respectively, and $87 million and $174 million during the three and six months ended August 3, 2025, respectively, related to SRS Distribution, Inc., and its subsidiaries.

(3) Adjusted operating margin is calculated as adjusted operating income divided by total net sales.

Our adjusted operating margin guidance for fiscal 2026 excludes an expected approximately 40 basis point impact from acquired intangible asset amortization.

RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE

	Three Months Ended			Six Months Ended
per share amounts	August 2, 2026	August 3, 2025	% Change	August 2, 2026	August 3, 2025	% Change
Diluted earnings per share (GAAP)	$4.79	$4.58	4.6%	$8.09	$8.03	0.7%
Impact of acquired intangible asset amortization	0.18	0.14		0.35	0.28
Income tax impact of non-GAAP adjustment	(0.05)	(0.04)		(0.09)	(0.07)
Adjusted diluted earnings per share (Non-GAAP)	$4.92	$4.68	5.1%	$8.35	$8.24	1.3%

(1) Calculated as the per share impact of acquired intangible asset amortization multiplied by the Company’s effective tax rate for the period.

Our adjusted diluted earnings per share guidance for fiscal 2026 excludes an expected after-tax impact of approximately $0.50 from acquired intangible asset amortization.

Contacts
Financial Community · Isabel Janci · Vice President of Investor Relations and Treasurer · 770-384-2666 · isabel_janci@homedepot.com
News Media · Sara Gorman · Senior Director of Corporate Communications · 770-384-2852 · sara_gorman@homedepot.com