Home Depot posted stronger-than-expected Home Depot Q2 sales on Tuesday, as homeowners turned to smaller renovation projects while the US housing market remained stalled.
Revenue rose to $47.86 billion from $45.28 billion a year earlier, beating the $47.24 billion analysts had forecast, according to FactSet data.
Globally, comparable store sales (a key measure of retail health) climbed 1.7%. In the US, the figure rose 1.3%.
Small projects drive Home Depot Q2 sales recovery
Chief Financial Officer Richard McPhail said customers had continued to engage in smaller projects across the business. ‘We saw broad based demand across the business as customers continued to engage in smaller projects,’ he said in prepared remarks.
Customer transactions dipped 1% in the quarter. Average spend per receipt, however, rose to $92.50 from $90.01 a year earlier.
Neil Saunders, managing director of GlobalData, said the small-project trend was encouraging. ‘From our data, the number of smaller projects undertaken during the quarter increased by 1.5% over the prior year,’ he said. ‘This may sound unimpressive, but it represents a step change from the declines of previous periods.’
Bigger-ticket work remained under pressure. ‘The number of bigger-ticket projects undertaken remains down, falling by 2.1% over last year,’ Saunders said. ‘Concerns around financing and a previous lack of moving activity both remain major drags on the bigger-ticket segment.’
Housing market drag and borrowing costs
The US housing market has been in a slump dating back to 2022, when mortgage rates began climbing from historic lows. Sales of previously occupied homes slowed again in July as record prices and elevated borrowing costs proved an obstacle for many buyers.
Existing home sales fell 1.7% last month from June, the National Association of Realtors said last week. The US median sales price rose 2% year on year to $434,100, a record for July, NAR said.
Homeowners considering home-equity loans are finding costs considerably higher than the ultra-low rates of the early 2020s. A project that appeared affordable at a 4% to 5% borrowing rate looks far more costly at 8% or above.
The average long-term US mortgage rate fell slightly for the first time in six weeks but remains higher than a year ago.
Express delivery launch and pricing detail
Home Depot also announced it is launching express delivery nationwide. Orders will reach customers within three hours or less.
According to Supply Chain Dive, the service will cost $7 as a flat fee in most major markets, rising to $10 in Los Angeles. No subscription or membership is required.
Earnings and full-year guidance
For the three months ended 2 August, Home Depot earned $4.77 billion, or $4.79 per share. A year earlier, it earned $4.55 billion, or $4.58 per share.
Excluding one-time items, earnings came to $4.92 per share, well ahead of the $4.73 per share Wall Street had predicted.
Despite the solid quarter, the Atlanta-based company kept its full-year sales growth guidance unchanged at between 2.5% and 4.5% for fiscal 2026. It also left its comparable sales outlook at flat to up 2%.
Home Depot said its guidance incorporates tariff refunds, which are expected to partially offset higher fuel, energy and other product input costs through the year. The company previously said it did not expect to raise prices because of tariffs, though executive Billy Bastek indicated some products on its shelves may disappear.
The company’s stock rose 2% in pre-market trading on Tuesday.
