revenue growth
2.5–4.5 pct
FY 2026
official guidance
THE HOME DEPOT, INC.
Last · —$295.51+1.59 (+0.54%)live · yahoo · 2h ago
Market cap$305.91B—
P/E · TTM21.5fwd — · eps —
Beta—vs S&P 500
Div yield—annual · TTM
52w range
——
Volume—session
| Revenue | $169.2B |
|---|---|
| Operating income | $21.0B |
| Net income | $14.2B |
| Free cash flow | $15.1B |
| Operating margin | 12.4% |
| Net margin | 8.4% |
| Return on equity | 85.6% |
| Period | TTM 2026-08-02 |
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OpenFilings analyst
Our analyst
Agentic read of the latest earnings call — recommendation updates when we process a new transcript. Research synthesis, not investment advice.
Strong BuyBuyHoldSellStrong Sell
Hold rather than buy aggressively:
Q2 was solid but not a clean demand inflection. Sales rose 5.7% to $47.9B, comps increased 1.7% and adjusted EPS rose 5.1% to $4.92, with July U.S. comps accelerating to 2.2%; however, transactions fell 1% and larger discretionary projects remain weak. The key earnings-quality issue is that the 33.7% gross margin benefited from a $685M tariff refund, while management acknowledged roughly 60 bps of underlying cost pressure and guided to only 12.8%-13.0% adjusted operating margin for FY26.
Near term
Q3 gross margin is likely to absorb much of the Q2 tariff-refund timing benefit; management expects the refund/cost-offset dynamic to run through Q2-Q3 and gross margin to be roughly flat year over year in Q4.
July U.S. comps accelerated to 2.2%, but management said early Q3 demand was merely consistent with Q2 and retained the wide FY26 comp range of flat to 2% because of volatility and frozen housing conditions.
Express Delivery, faster big-and-bulky fulfillment and next-day appliance coverage could support conversion and share gains, but the call provided no quantified sales or profit contribution from these initiatives.
SRS is comping above the company average and is expected to deliver mid-single-digit organic growth, creating a potential back-half contribution alongside planned branch openings.
Longer term
The strongest structural opportunity is the combined Pro ecosystem: SRS, GMS, QuoteCenter, order management, delivery tracking and B2B tools could increase Home Depot’s wallet share in complex purchases. Management said 90% of stores closed an SRS sale in the past year, but did not quantify the resulting incremental revenue or margin.
Interconnected retail appears to be producing measurable engagement: online sales grew 11% for the fifth consecutive quarter, with higher traffic and conversion, while delivery lead times for big-and-bulky products fell 45% over 18 months.
The core housing recovery thesis remains unresolved. Housing turnover has stayed near 3% of housing stock for four years, and management sees no current inflection point; sustained low turnover can continue to suppress high-value remodel demand even if repair-and-maintenance categories remain resilient.
Competitive differentiation is plausible in Pro distribution and fulfillment, but the analyst challenge on how much Q2 reflected Home Depot-specific share gains versus broader consumer reengagement was not answered with quantified share data.
Red flags
Q2 profitability was materially supported by a $685M COGS reduction from IEEPA refunds; management expects the benefit to be fully offset by fuel, energy and other input-cost pressure, making the reported gross-margin expansion low quality.
Analysts highlighted that underlying gross margin may have missed expectations excluding the tariff refund. Management attributed the roughly 120 bps ex-refund pressure to approximately 60 bps of acquisition mix and 60 bps of incremental costs, but offered limited visibility into the durability of the cost burden.
Inventory increased approximately $2B year over year while turns declined to 4.5x from 4.6x, and ROIC fell to 24.8% from 27.2%, signs that the acquisition and inventory build are weighing on capital efficiency.
Management defended the broad comp range despite Q2 acceleration and easier comparisons ahead. The lack of a more constructive guide after exceeding internal expectations suggests limited confidence that larger-project demand has bottomed.
Leadership continuity is a near-term watch item because CEO Ted Decker is on temporary medical leave, although management said the leadership team and board remain focused on execution.
Forward outlook
gross margin
33.1 pct
FY 2026
official guidance
operating margin
12.4–12.6 pct
FY 2026
official guidance
operating margin
12.8–13 pct
FY 2026
official guidance
eps diluted
—
FY 2026
official guidance
OpenFilings analyst view from primary-source filings and earnings calls — not investment advice.
From latest 10-K · 2026-03-18
- Acquisition Integration
- Pro Customer Growth
- Margin Pressure
- High Interest Rates
- Tariff Exposure
- Leverage
- Digital Fulfillment
- Share Repurchase Pause
Red flags
- Underlying traffic remains weak: comparable customer transactions declined 1.0% and total customer transactions fell 2.2% to 1,601.5 million, with sales growth relying partly on a 1.4% increase in average ticket.
- Profitability deteriorated: operating expenses rose to 20.6% of sales from 19.9%, operating margin declined to 12.7% from 13.5%, and net margin fell to 8.6% from 9.3%.
- ROIC declined to 25.7% from 31.3%, driven by higher average equity and higher long-term debt associated largely with SRS financing; inventory turnover also fell to 4.4x from 4.7x.
- Leverage and financing needs increased after the acquisitions: commercial-paper borrowings were $4.5B at year-end versus $316M a year earlier, while fiscal 2025 included $4.1B of net commercial-paper proceeds and $2.2B of net long-term-debt issuance.
- Capital returns are constrained: share repurchases have been paused since March 2024, with $11.7B remaining under the authorization, while fiscal 2025 dividends totaled $9.2B.
- GMS was excluded from management’s internal-control assessment because of its recent acquisition; it represented approximately 3% of consolidated assets excluding goodwill and intangibles and 1% of consolidated sales at year-end.
Upcoming earnings
1:30 PM UTC+1
Period
Oct 2026
Est. EPS
$3.84
Est. revenue
42.8B