01—Abstract
Summary
Summary of the 8-K filed August 18, 2026. Cited figures are marked; the original filing is the authoritative source.
The Home Depot reported second-quarter fiscal 2026 results (quarter ended August 2, 2026) that beat its internal expectations.
Net sales rose 5.7% to $47.9 billiona, comparable sales grew 1.7% (U.S. comps +1.3%), and GAAP diluted EPS increased 4.6% to $4.79. Adjusted diluted EPS rose 5.1% to $4.92. Growth was driven by average ticket (+2.8%), while comparable customer transactions declined 1.0%, suggesting customers are completing smaller projects.
Gross margin improved to about 33.7% from 33.4% a year earlier, but SG&A grew 8.5%, faster than sales, so GAAP operating margin slipped to 14.3% from 14.5%. Acquisitions, including SRS and GMS, contributed to higher expenses and intangible amortization. Management reaffirmed all fiscal 2026 guidance, including comparable sales of roughly flat to +2.0%, GAAP diluted EPS growth of roughly flat to +4.0% from $14.23b, and adjusted diluted EPS growth of roughly flat to +4.0% from $14.69.
The guidance assumes IEEPA tariff refunds will partially offset unplanned fuel, energy, and other input cost pressures. Because the guidance was reaffirmed rather than raised, the quarter's beat does not change the full-year outlook. Balance sheet and cash flow were solid.
Six-month operating cash flow reached $11.4 billionc, up from $9.0 billion, and capital expenditures were $1.7 billion. Free cash flow was roughly $9.7 billion, up from about $7.2 billion. Total debt declined to roughly $52.9 billion from about $55.8 billion at fiscal year-end, while stockholders' equity increased to $16.6 billion.
Dividends paid were $4.6 billiond over six months, and acquisition payments totaled $1.3 billion. The results were furnished under Item 2.02 and are not deemed filed for Section 18 purposes.
02—Key points
Key Highlights
- Net sales rose 5.7% year over year to $47.9 billion, with comparable sales up 1.7% (U.S. comps +1.3%).
- Comparable average ticket increased 2.8%, while comparable customer transactions fell 1.0%, indicating customers are pursuing smaller projects.
- GAAP diluted EPS was $4.79, up 4.6% from $4.58; adjusted diluted EPS was $4.92, up 5.1% from $4.68, and both beat management's expectations.
- Gross margin improved to roughly 33.7% from 33.4%, but SG&A grew 8.5%, pushing GAAP operating margin down to 14.3% from 14.5% (adjusted 14.7% vs. 14.8%).
- All fiscal 2026 guidance was reaffirmed, including roughly flat to +2.0% comparable sales and flat to +4.0% EPS growth, with IEEPA tariff refunds expected to partially offset fuel, energy, and input cost pressures.
- Six-month operating cash flow rose to $11.4 billion from $9.0 billion, and total debt declined to about $52.9 billion from roughly $55.8 billion at fiscal year-end 2025.
- Acquisition spending of $1.3 billion in the first half, versus $0.2 billion a year earlier, and higher goodwill and intangible assets reflect the continued expansion of SRS and GMS.
03—Questions
Frequently Asked Questions
Did Home Depot raise its fiscal 2026 guidance after the strong quarter?
No. The company reaffirmed its fiscal 2026 guidance rather than raising it. This includes comparable sales of roughly flat to +2.0%, GAAP diluted EPS growth of roughly flat to +4.0% from $14.23, and adjusted diluted EPS growth of roughly flat to +4.0% from $14.69. Management noted that IEEPA tariff refunds are expected to partially offset unplanned fuel, energy, and other product input costs.
Why did sales grow faster than comparable sales?
Total net sales grew 5.7% while comparable sales grew 1.7%. The gap reflects contributions from non-comparable sources, primarily acquisitions such as SRS and GMS, which are not included in comparable sales. Customer transaction and average ticket metrics also exclude HD Supply and SRS.
Why did operating margin decline even though gross margin improved?
Gross margin expanded to about 33.7% from 33.4%, but selling, general and administrative expenses rose 8.5%, outpacing sales growth of 5.7%. Depreciation and amortization also rose 5.7%, including higher amortization of acquired intangible assets. Together these pushed GAAP operating margin down 20 basis points to 14.3%.
Is the adjusted EPS figure comparable to GAAP results, and how large is the gap?
Adjusted diluted EPS excludes amortization of acquired intangible assets, net of tax. In Q2 the adjustment was $0.18 pre-tax per share, or $0.13 after tax, bringing GAAP EPS of $4.79 to adjusted EPS of $4.92. Management expects the full-year adjusted EPS guidance to exclude about $0.50 of after-tax amortization. Investors should rely primarily on GAAP results and treat the non-GAAP measures as supplemental.
04—Continue