Home Depot Posts Strong Q2 Earnings Amid Market Uncertainty

Home Depot has reported its fiscal second-quarter results, beating Wall Street expectations on both the top and bottom lines. Despite operating in ‘frozen housing market conditions,’ the home improvement retailer reaffirmed its full fiscal-year guidance.

CFO Richard McPhail’s Comments

In a call with CNBC, CFO Richard McPhail highlighted the company’s continued investment in its strategy, which has led to share gain and improved customer service. McPhail noted that Home Depot operates in a ‘frozen housing market,’ but the company’s focus on executing its strategy has allowed it to take share and serve customers better.

‘We’re focused on controlling what we can control,’ McPhail said. ‘We have been consistent through the years that in spite of a frozen housing environment, we’re going to keep leaning into investment because we know that over the long run, conditions for home improvement demand are strong.’

Q2 Results

Home Depot’s Q2 results exceeded expectations, with earnings per share (EPS) coming in at $4.92, beating the expected $4.73. Revenue reached $47.86 billion, surpassing the expected $47.27 billion. The company reported net income of $4.77 billion, or $4.79 per share, compared to $4.55 billion, or $4.58 per share, in the same period last year.

Excluding one-time items, Home Depot’s adjusted EPS was $4.92, while revenue rose 5.7% to $47.86 billion. The company’s comparable sales rose 1.7%, beating expectations of 0.9%. This is the highest comparable sales number Home Depot has posted since the fiscal third quarter of 2022.

Tariff Refunds and Guidance

Home Depot also announced that it received $730 million in tariff refunds during the second quarter, representing the ‘vast majority’ of what the company expects. The company used $685 million of these refunds to reduce the cost of goods sold, with the remaining $45 million sitting in inventory.

The company reaffirmed its fiscal 2026 guidance, which includes tariff refunds that are expected to partially offset unplanned fuel, energy, and other product input costs. Home Depot expects total sales growth for the year to be between 2.5% and 4.5%, with operating margin between 12.4% and 12.6%.

CEO Ted Decker’s Medical Leave

Home Depot also announced that CEO Ted Decker will be taking a temporary medical leave of absence for a few months. Ann-Marie Campbell, Home Depot’s senior executive vice president of U.S. stores and operations, will oversee the day-to-day operations during this period, while CFO Richard McPhail will head the financial management and pro business.

‘We’re happy with our level of engagement in the first half, but our customers are telling us they’re worried about inflation, fuel costs, and general uncertainty,’ McPhail said. ‘While we’re happy with their level of engagement, they’re just hesitant to take on bigger projects.’

Home Depot continues to operate in a challenging market, but the company’s focus on executing its strategy and investing in its business has allowed it to take share and serve customers better.