Home Depot reported fiscal second-quarter results that beat Wall Street expectations on both revenue and earnings on Tuesday, while the home improvement retailer reaffirmed its full-year guidance amid what its chief financial officer described as “frozen housing market conditions.”
The company reported adjusted earnings per share of $4.92, compared with the $4.73 expected by analysts, while revenue reached $47.86 billion, above the $47.24 billion consensus estimate.
Net income rose to $4.77 billion, or $4.79 per share, from $4.55 billion, or $4.58 per share, a year earlier.
Excluding one-time items, adjusted earnings per share came to $4.92. Revenue increased 5.7% year over year.
Comparable sales increased 1.7%, beating expectations for a 0.9% rise, according to StreetAccount. CFO Richard McPhail said it was the strongest comparable-sales growth Home Depot has recorded since the fiscal third quarter of 2022.
McPhail told CNBC that the company continues to operate in “frozen housing market conditions”, as elevated mortgage rates, limited housing turnover and economic uncertainty weigh on consumers' willingness to undertake projects associated with buying or selling homes.
Home Depot nevertheless reaffirmed its fiscal 2026 guidance, which includes tariff refunds that are “expected to partially offset unplanned fuel, energy, and other product input costs”.
McPhail said the refunds would allow the retailer to “maintain value” despite cost pressures elsewhere.
On a call with analysts on Tuesday, McPhail said, "We received $730 million in tariff refunds during the quarter. We received all those right around the end of the month of June. And those refunds represent the vast majority of what we would expect to receive for those IEEPA refunds that we filed for.
"There's an immaterial amount that we expect we may receive in the back half.Of that $730 million, $685 million reduced our cost of goods sold as they applied to products that have already been sold.
"The remaining $45 million remains in inventory, and will hit the P&L as we turn inventory through the remainder of the year."
Home Depot has faced pressure from lower housing turnover, higher mortgage rates and economic uncertainty, with customers delaying projects typically associated with purchasing a new home.
The retailer has sought to attract more professional customers, a segment executives have previously said is less affected by broader macroeconomic conditions.
The company also announced last week that CEO Ted Decker is taking a “temporary medical leave of absence” for several months. Ann-Marie Campbell, Home Depot's senior executive vice president of U.S. stores and operations, will oversee day-to-day operations, while McPhail will manage financial operations and the pro business.
Home Depot currently has a market capitalisation of $336.52 billion.
