Home Depot reaffirms guidance amid 'frozen housing market conditions'

In the second quarter, Home Depot exceeded Wall Street's expectations with a 6% revenue growth, reaching $47.9 billion, surpassing the $47.3 billion forecast. Adjusted earnings also surpassed predictions, growing 0.2% to $4.79 per share, compared to the $4.73 expected. CFO Richard McPhail and senior executive vice president Ann-Marie Campbell are temporarily leading the company as CEO Ted Decker undergoes medical leave.

Customers visited Home Depot less often during the quarter, but their average spend increased. Same-store sales rose 1.7%, outpacing the 1% forecast, and US same-store sales climbed 1.3%, higher than the 0.9% predicted. Sales of items priced over $1,000 increased 2.4% year over year. Momentum came from the spring outdoor categories, such as live goods, mulch, patio items, and grills.

Despite broader demand, larger discretionary projects continue to face challenges due to record-low housing turnover, largely attributed to persistent 30-year fixed mortgage rates around 6.7%. The company anticipates this situation will remain unchanged as there are no signs of a housing inflection point. Home Depot reiterated its 2026 forecast, projecting total sales growth of 2.5% to 4.5% and same-store sales growth of flat to up 2%.

The company received $730 million in tariff refunds, reducing its cost of goods sold and offsetting higher prices for fuel, energy, resin, and metals. Analyst Michael Baker believes these results set a higher bar for Lowe's, which is expected to report a same-store sales increase of 0.7% when it reports quarterly results.