The Home Depot — Second Quarter Fiscal 2026 Earnings Summary

Financial Performance

• Reported second quarter fiscal 2026 net sales of $47.9 billion, a 5.7% increase from $45.3 billion in the same period of fiscal 2025.
• Net earnings for the quarter were $4.8 billion ($4.79 per diluted share), compared to $4.6 billion ($4.58 per diluted share) in the prior year period.
• Adjusted diluted earnings per share for the quarter were $4.92, up from $4.68 in the prior year period.
• Gross profit was $16.1 billion, representing a 6.5% increase year-over-year.
• Operating income was $6.8 billion, a 4.3% increase from the prior year.
• Cash and cash equivalents stood at $2.1 billion at the end of the quarter, down from $2.8 billion in the prior year period.
• Merchandise inventories increased to $26.8 billion from $24.8 billion in the prior year period.
• Total debt (short-term and long-term) decreased to $48.7 billion from $52.3 billion in the prior year period.
• Net cash provided by operating activities for the six months ended August 2, 2026, was $11.4 billion, compared to $9.0 billion in the prior year.
• Capital expenditures for the six months ended August 2, 2026, were $1.7 billion.

Guidance and Future Outlook

• Reaffirmed fiscal 2026 guidance, which includes IEEPA tariff refunds expected to partially offset unplanned fuel, energy, and product input costs.
• Full-year total sales growth guidance remains approximately 2.5% to 4.5%.
• Full-year comparable sales growth guidance remains approximately flat to 2.0%.
• Full-year gross margin guidance is approximately 33.1%.
• Full-year operating margin guidance is approximately 12.4% to 12.6%.
• Full-year adjusted operating margin guidance is approximately 12.8% to 13.0%.
• Full-year diluted earnings-per-share growth guidance is approximately flat to 4.0% from $14.23 in fiscal 2025.
• Full-year adjusted diluted earnings-per-share growth guidance is approximately flat to 4.0% from $14.69 in fiscal 2025.
• Full-year net interest expense guidance is approximately $2.3 billion.
• Full-year effective tax rate guidance is approximately 24.3%.
• Full-year capital expenditures guidance is approximately 2.5% of total sales.

Business Segments and Product Lines

• Comparable sales for the second quarter increased 1.7%, with U.S. comparable sales increasing 1.3%.
• Comparable customer transactions decreased 1.0% in the quarter, while comparable average ticket increased 2.8%.
• The company operates a total of 2,364 retail stores and over 1,340 SRS locations across the U.S., Canada, and Mexico.
• The company employs over 470,000 associates.
• Approximately 15 new stores are expected to open during fiscal 2026.
• Acquired intangible asset amortization related to SRS Distribution, Inc. was $125 million for the quarter and $244 million for the six-month period.

Market and Competitive Landscape

• Customers continued to engage in smaller projects, driving broad-based demand across the business.
• The company operates in a dynamic environment requiring execution focus on customer service.
• The Home Depot is included in the Dow Jones industrial average and Standard & Poor's 500 index.

Risks and Challenges

• Forward-looking statements note risks including macroeconomic conditions, changing customer preferences, and competition.
• Potential impacts from tariffs, trade policy changes, and international trade disputes are highlighted.
• Risks include supply chain disruptions, labor cost and availability issues, and cybersecurity events.
• Geopolitical tensions, military conflicts, and natural disasters could disrupt business operations.
• Changes in interest rates, foreign currency exchange rates, and commodity prices may affect financial results.
• The company faces risks related to the ability to maintain safe store environments and meet sustainability goals.

Management Commentary and Tone

• Richard McPhail, Executive Vice President and Chief Financial Officer, stated that second quarter results exceeded expectations.
• Ann-Marie Campbell, Senior Executive Vice President, credited investments across the business and associates' focus on customer service for the results.
• Management expressed confidence in the team's ability to execute throughout a dynamic environment.

Other Key Points

• The company paid $4.6 billion in cash dividends during the six months ended August 2, 2026.
• Net cash used in financing activities for the six-month period was $7.7 billion.
• Payments for businesses acquired, net, were $1.3 billion for the six months ended August 2, 2026, compared to $233 million in the prior year.
• The company conducted a conference call on August 18, 2026, to discuss results.
• Non-GAAP financial measures used include adjusted operating income, adjusted operating margin, and adjusted diluted earnings per share, which exclude the impact of amortization expense from acquired intangible assets.