Pros continue to outperform DIY shoppers at Home Depot
The segment is still the “clearest opportunity to drive growth” at the home improvement retailer even as it beat its own expectations in Q2.
Home Depot reported solid gains in its second quarter, yet the housing market slump keeps the outlook for the rest of 2026 unchanged. Revenue grew to $47.86 billion from $45.28 billion, surpassing Wall Street's expectations of $47.24 billion. Sales at stores open at least a year, a key metric, rose 1.7% globally and 1.3% in the U.S. Comparable store sales increased 1.3%.
CFO Richard McPhail noted broad-based demand across the business as customers engaged in smaller projects. However, customer transactions decreased by 1%, while spending per average receipt rose to $92.50 from $90.01 a year earlier. Neil Saunders, GlobalData's managing director, observed a 1.5% increase in smaller projects compared to the prior year, but pointed out a decline of 2.1% in bigger-ticket projects.
Financing concerns and reduced activity remain hurdles for larger projects. Homeowners are finding it more expensive to take out home equity loans due to higher borrowing rates. The U.S. housing market has been in decline since 2022, with July sales falling 1.7% from June. Home prices reached unprecedented levels in July, with a 2% increase from the previous year to $434,100.
Home Depot earned $4.77 billion, or $4.79 per share, for the three months ending Aug. 2, up from $4.55 billion, or $4.58 per share, a year earlier. Excluding one-time items, earnings were $4.92 per share, surpassing Wall Street's prediction of $4.73 per share. CEO Ted Decker is on temporary medical leave, with CFO McPhail and Senior Executive Vice President Ann-Marie Campbell overseeing operations.
Home Depot expects Decker to return within the next few months. The company also announced the launch of nationwide express delivery, offering orders within 3 hours for a small flat fee. Despite strong quarterly performance, Home Depot maintained its sales growth guidance for fiscal 2026 between 2.5% and 4.5%, leaving comparable sales unchanged.
The company expects tariff refunds to partially offset higher costs throughout the year. Home Depot's stock showed slight gains in early trading.
Written by urgent.news from Fast Company's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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