Q2 FY2026
Filed Aug 18, 2026The Home Depot Announces Second Quarter Fiscal 2026 Results; Reaffirms Fiscal 2026 Guidance
Second-quarter sales increased 5.7%, comparable sales increased 1.7%, and adjusted diluted earnings per share increased 5.1%. The company reaffirmed fiscal 2026 guidance, although operating expenses increased 8.2% and GAAP operating margin declined to 14.3% from 14.5%.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $47,861 million | – | 5.7% |
| Cost of salesGAAP | $31,746 million | – | 5.3% |
| Gross profitGAAP | $16,115 million | – | 6.5% |
| Selling, general and administrative expensesGAAP | $8,424 million | – | 8.5% |
| Depreciation and amortizationGAAP | $852 million | – | 5.7% |
| Total operating expensesGAAP | $9,276 million | – | 8.2% |
| Operating incomeGAAP | $6,839 million | – | 4.3% |
| Operating marginGAAP | 14.3% | – | – |
| Adjusted operating incomenon-GAAP | $7,017 million | – | 4.8% |
| Adjusted operating marginnon-GAAP | 14.7% | – | – |
| Interest income and other, netGAAP | $(59) million | – | N/M |
| Interest expenseGAAP | $583 million | – | 1.4% |
| Interest and other, netGAAP | $524 million | – | (4.7)% |
| Earnings before provision for income taxesGAAP | $6,315 million | – | 5.2% |
| Provision for income taxesGAAP | $1,549 million | – | 6.5% |
| Net earningsGAAP | $4,766 million | – | 4.7% |
| Basic earnings per shareGAAP | $4.79 | – | 4.4% |
| Diluted earnings per shareGAAP | $4.79 | – | 4.6% |
| Adjusted diluted earnings per sharenon-GAAP | $4.92 | – | 5.1% |
| Basic weighted average common sharesGAAP | 994 million | – | 0.2% |
| Diluted weighted average common sharesGAAP | 996 million | – | 0.2% |
| Comparable salesother | 1.7% | – | – |
| Comparable sales in the U.S.other | 1.3% | – | – |
| Comparable customer transactionsother | (1.0)% | – | – |
| Comparable average ticketother | 2.8% | – | – |
| Customer transactionsother | 443.2 million | – | (0.8)% |
| Average ticketother | $92.50 | – | 2.8% |
| Six-month net salesGAAP | $89,626 million | – | 5.3% |
| Six-month gross profitGAAP | $29,896 million | – | 4.6% |
| Six-month operating incomeGAAP | $11,820 million | – | 1.1% |
| Six-month operating marginGAAP | 13.2% | – | – |
| Six-month adjusted operating incomenon-GAAP | $12,169 million | – | 1.7% |
| Six-month adjusted operating marginnon-GAAP | 13.6% | – | – |
| Six-month net earningsGAAP | $8,055 million | – | 0.9% |
| Six-month diluted earnings per shareGAAP | $8.09 | – | 0.7% |
| Six-month adjusted diluted earnings per sharenon-GAAP | $8.35 | – | 1.3% |
| Net cash provided by operating activitiesGAAP | $11,422 million | – | – |
| Capital expendituresGAAP | $(1,724) million | – | – |
| Cash dividendsGAAP | $(4,643) million | – | – |
| Cash and cash equivalentsGAAP | $2,085 million | – | – |
| Short-term debtGAAP | $4,248 million | – | – |
| Current installments of long-term debtGAAP | $4,697 million | – | – |
| Long-term debt, excluding current installmentsGAAP | $43,951 million | – | – |
Fiscal 2026 outlook
- RevenueTotal sales growth of approximately 2.5% to 4.5%
- Gross marginGross margin of approximately 33.1%
- Tax rateEffective tax rate of approximately 24.3%
- NoteComparable sales growth of approximately flat to 2.0%
- NoteApproximately 15 new stores
- NoteOperating margin of approximately 12.4% to 12.6%
- NoteAdjusted operating margin of approximately 12.8% to 13.0%
- NoteNet interest expense of approximately $2.3 billion
- NoteDiluted earnings-per-share to grow approximately flat to 4.0% from $14.23 in fiscal 2025
- NoteAdjusted diluted earnings-per-share to grow approximately flat to 4.0% from $14.69 in fiscal 2025
- NoteCapital expenditures of approximately 2.5% of total sales
- NoteGuidance includes IEEPA tariff refunds, which are expected to partially offset unplanned fuel, energy, and other product input costs throughout the fiscal year.
- NoteAdjusted operating margin guidance excludes an expected approximately 40 basis point impact from acquired intangible asset amortization.
- NoteAdjusted diluted earnings per share guidance excludes an expected after-tax impact of approximately $0.50 from acquired intangible asset amortization.
Capital returns
- Cash dividends of $(4,643) million for the six months ended August 2, 2026, compared with $(4,574) million for the six months ended August 3, 2025.
- Proceeds from sales of common stock were $192 million for the six months ended August 2, 2026, compared with $163 million for the six months ended August 3, 2025.
- No share repurchases were reported in the filing.
What drove it
- Sales increased $2.6 billion, or 5.7%, from the second quarter of fiscal 2025.
- Comparable sales increased 1.7%, while comparable sales in the U.S. increased 1.3%.
- Management said it saw broad based demand across the business as customers continued to engage in smaller projects.
- Comparable average ticket increased 2.8%, while comparable customer transactions declined (1.0)%.
- Gross profit increased 6.5%, exceeding the 5.7% increase in net sales.
- The company cited investments across the business and associates' focus on customer service.
Concerns
- Comparable customer transactions declined (1.0)% and total customer transactions declined (0.8)%.
- Total operating expenses increased 8.2%, faster than net sales growth of 5.7%.
- GAAP operating margin declined to 14.3% from 14.5%, and adjusted operating margin declined to 14.7% from 14.8%.
- Fiscal 2026 guidance assumes IEEPA tariff refunds will partially offset unplanned fuel, energy, and other product input costs.
- The company reaffirmed rather than raised fiscal 2026 guidance despite stating that second-quarter results exceeded its expectations.
What to watch
- Whether comparable sales remain within the fiscal 2026 guidance range of approximately flat to 2.0%.
- Whether transaction trends improve from the second-quarter comparable customer-transactions decline of (1.0)%.
- The persistence of average-ticket growth, which was 2.8% in the second quarter.
- Operating-margin delivery against fiscal 2026 GAAP guidance of approximately 12.4% to 12.6% and adjusted guidance of approximately 12.8% to 13.0%.
- The effect of IEEPA tariff refunds and unplanned fuel, energy, and other product input costs.
- Execution against approximately 15 new stores and capital expenditures of approximately 2.5% of total sales.
Balance sheet and cash flow
- Cash and cash equivalents were $2,085 million at August 2, 2026, compared with $2,804 million at August 3, 2025 and $1,389 million at February 1, 2026.
- Merchandise inventories were $26,847 million at August 2, 2026, compared with $24,843 million at August 3, 2025 and $25,817 million at February 1, 2026.
- Total assets were $109,384 million and total liabilities were $92,767 million at August 2, 2026.
- Net cash provided by operating activities was $11,422 million for the six months ended August 2, 2026, compared with $8,968 million in the prior-year period.
- Capital expenditures were $(1,724) million for the six months ended August 2, 2026, compared with $(1,723) million in the prior-year period.
- Payments for businesses acquired, net were $(1,333) million, compared with $(233) million in the prior-year period.
- Repayments of long-term debt were $(3,040) million, compared with $(1,199) million in the prior-year period.
- Net cash used in financing activities was $(7,701) million, compared with $(5,980) million in the prior-year period.
Analysis
Home Depot delivered a solid second quarter, with net sales of $47,861 million, up 5.7%, and comparable sales up 1.7%. Management characterized demand as broad based and said customers continued to engage in smaller projects. The sales composition showed that comparable average ticket increased 2.8%, while comparable customer transactions declined (1.0)%, making ticket growth the reported support for comparable-sales growth.
Profitability improved in dollars but was mixed in margin terms. Gross profit increased 6.5% to $16,115 million, ahead of net sales growth. Operating income increased 4.3% to $6,839 million, while total operating expenses increased 8.2% to $9,276 million. Consequently, GAAP operating margin was 14.3%, compared with 14.5%, and adjusted operating margin was 14.7%, compared with 14.8%. Net earnings increased 4.7% to $4,766 million, while adjusted diluted earnings per share increased 5.1% to $4.92.
Cash generation was materially higher over the first six months. Net cash provided by operating activities was $11,422 million, compared with $8,968 million in the prior-year period, while capital expenditures were essentially unchanged at $(1,724) million. The company paid $(4,643) million of cash dividends and repaid $(3,040) million of long-term debt. Cash and cash equivalents ended at $2,085 million, and long-term debt excluding current installments was $43,951 million.
The company reaffirmed its fiscal 2026 framework, including total sales growth of approximately 2.5% to 4.5%, comparable sales growth of approximately flat to 2.0%, and GAAP operating margin of approximately 12.4% to 12.6%. Guidance incorporates IEEPA tariff refunds that are expected to partially offset unplanned fuel, energy, and other product input costs. The key operating questions are whether ticket-led comparable-sales growth can continue while transactions remain negative, and whether expense growth and input costs permit delivery within the reaffirmed margin ranges.
No prior-quarter standalone figures or previous-quarter outlook were supplied in the filing, so a documented sequential comparison and an assessment versus prior guidance cannot be made from the provided materials.
Management, verbatim
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
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.
Ann-Marie Campbell, Senior Executive Vice President
Not in the filing
stated, not guessed- Previous quarterly outlook was not provided, so comparisons of actual results versus prior guidance are unavailable.
- Reportable segment revenue and segment-level performance were not provided.
- GAAP gross margin for the second quarter was not explicitly reported.
- Free cash flow was not explicitly reported.
- Share-repurchase activity was not reported.
- A quarterly dividend per share was not reported.
- Standalone first-quarter fiscal 2026 financial results were not provided for sequential comparisons.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.