Home Depot (HD) Stock Gains as Q1 Results Surpass Analyst Expectations

Key Takeaways

• First-quarter adjusted earnings per share reached $3.43, exceeding the consensus estimate of $3.41, representing a decline from last year’s $3.56
• Total revenue increased 4.8% year-over-year to $41.77 billion, surpassing Wall Street’s projection of $41.59 billion
• Comparable store sales advanced 0.6%, while U.S. comp sales grew 0.4%; transaction values increased 2.3% to reach $92.76
• Management maintained its annual outlook, projecting comparable sales growth between flat and 2%, with adjusted EPS growth of flat to 4%
• Shares have declined over 12% year-to-date in 2026, trailing both Lowe’s performance and the broader S&P 500 index

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Shares of Home Depot (HD) advanced 0.7% during premarket hours on Tuesday following the release of first-quarter financial results that exceeded Wall Street’s projections.

The Home Depot, Inc., HD

Adjusted earnings per share registered at $3.43, narrowly surpassing the analyst consensus of $3.41. This figure represents a decrease from the $3.56 recorded during the comparable quarter last year. Total revenue climbed 4.8% to reach $41.77 billion, outpacing the estimated $41.59 billion.

Net earnings for the three-month period decreased 4.2% to $3.29 billion, compared with $3.43 billion in the prior-year quarter. Diluted earnings per share totaled $3.30, down from $3.45 in the first quarter of 2025.

Comparable store sales increased 0.6% on a consolidated basis, with domestic comparable sales posting a 0.4% gain. Transaction counts declined 1.3%, though the average purchase amount expanded 2.3% to $92.76.

The retailer confirmed its previously announced fiscal 2026 projections, anticipating total sales expansion of 2.5% to 4.5%, comparable sales growth ranging from flat to 2%, and adjusted diluted earnings per share growth between flat and 4% compared to the $14.69 reported for fiscal 2025.

Large-Scale Renovation Projects Remain Stalled

HD stock has experienced a decline exceeding 12% since the beginning of 2026, underperforming competitor Lowe’s, which has dropped less than 10%, and significantly trailing the S&P 500’s nearly 8% gain during the identical timeframe.

Rising inflation reaching three-year peaks combined with stagnant wage growth have delayed expectations for any substantial sales recovery across the home improvement retail sector.

Strategic Focus on Professional Customer Segment Intensifies

Professional clientele — including contractors, roofing specialists, and skilled tradespeople — generate approximately half of Home Depot’s total revenue, and the company has been aggressively expanding its presence in this category.

The 2024 purchase of SRS Distribution brought an extensive network catering to roofing, landscaping, and pool industry professionals. The subsequent GMS acquisition broadened its footprint in specialty building materials.

Most recently, SRS completed the acquisition of Mingledorff’s, a wholesale provider of HVAC systems, components, and related supplies.

McPhail emphasized that the acquisition approach aims to capture a larger portion of the $700 billion professional contractor market.

As of the conclusion of Q1, Home Depot maintained operations at 2,361 retail locations and more than 1,280 SRS facilities, employing a workforce exceeding 470,000 individuals.

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