Home Depot Tops Estimates, Even With the Housing Market Stuck
CFO Richard McPhail says the company is "taking share" even with housing frozen, as comparable sales hit their highest mark in three years.
Img Credit : Seoul Economic Daily
Even Home Depot's own finance chief sounded a little surprised by these numbers.
On Tuesday, the retailer posted fiscal second-quarter results that beat what Wall Street had modeled — across earnings, revenue, and sales growth. Adjusted earnings landed at $4.92 a share, well past the $4.73 analysts expected. Revenue hit $47.86 billion. That's up 5.7% from a year ago.
CFO Richard McPhail wasn't shy about the environment behind those numbers. Speaking with CNBC, he called current housing conditions "frozen" — his word, not a euphemism. And yet the company grew anyway.
"We continue to operate in what I call 'frozen housing market conditions,' but we also know that we're taking share and that we're serving our customers better every day," McPhail told the network. Investment and execution, he said — not any recovery in housing itself — is what's driving the numbers.
Comparable sales rose 1.7% across the company, better than the 0.9% Wall Street had penciled in. US comps specifically climbed 1.3%. McPhail pointed out that's Home Depot's best comp number since fiscal Q3 2022 — three years, buried in an otherwise sluggish housing cycle.
Net earnings came in around $4.8 billion. That's $4.79 per diluted share, up from $4.58 last year. Online sales grew 11%, marking five straight quarters of double-digit digital growth now.
A lot of the earnings call centered on the pro contractor business. Analysts kept pushing on how SRS and GMS — two of Home Depot's recent acquisitions — were performing together, and whether cross-selling between them was actually translating into bigger jobs. Management's answer: yes, largely because of tools like QuoteCenter, real-time delivery tracking, and AI-assisted material list builders. Pro customers are consolidating bigger, messier projects with Home Depot instead of splitting the work across multiple suppliers.
Not everything moved the right direction, though. Total customer transactions dipped 0.8%, down to 443.2 million for the quarter. SG&A expenses grew faster than sales too — up 8.5% against 5.7% revenue growth — and operating margin slipped slightly versus last year.
Still, Home Depot held onto its full-year guidance. That includes projected IEEPA tariff refunds, which the company expects will help offset unplanned fuel, energy, and input cost increases through the rest of fiscal 2026. Management's still targeting 2.5% to 4.5% sales growth for the year, with adjusted EPS landing somewhere between flat and up 4% versus fiscal 2025.
Shares moved higher in premarket trading after the release.
The read from analysts, more or less: Home Depot isn't sitting around waiting for housing to thaw. It's pulling business from competitors and squeezing more out of every project that comes through the door — big renovation or small weekend fix — and for now, that's enough to keep growing even when the broader market won't.
