Home Depot reported that its second-quarter sales rose 5.7% year-over-year to $47.9 billion, with comparable sales increasing 1.7% and U.S. comparable sales up 1.3% [1]. The company attributed this growth to continued demand for smaller-scale home improvement projects, as elevated mortgage rates and high home prices have made larger renovations less attractive to consumers [1]. Chief Financial Officer Richard McPhail stated, 'Our second quarter results exceeded our expectations. We saw broad-based demand across the business as customers continued to engage in smaller projects' [1].
Despite a 1% decline in comparable customer transactions, shoppers spent more per visit, with the average ticket rising 2.8% to $92.50 [1]. The constrained housing market, marked by a 1.7% drop in existing-home sales in July to a seasonally adjusted annual rate of 4.06 million and a 2% increase in the median existing-home price to $434,100, has contributed to this shift in consumer behavior [1]. Borrowing costs remain high, with the average rate on a 30-year fixed mortgage at 6.67% as of August 13, up from 6.58% a year earlier [1].
In response to these market conditions, Home Depot announced it will cut about 800 jobs tied to its Atlanta store support center as part of a corporate restructuring [1]. The company reported second-quarter net earnings of $4.8 billion, or $4.79 per diluted share, with adjusted earnings at $4.92 per share [1].
Looking ahead, Home Depot reaffirmed its fiscal 2026 outlook, expecting total sales growth of approximately 2.5% to 4.5% and comparable sales growth ranging from flat to 2% for the year, consistent with its earlier guidance [1].
CONCLUSION
Home Depot's Q2 results indicate resilience in consumer spending on home improvement, particularly for smaller projects, despite ongoing affordability challenges in the housing market. The company's reaffirmed outlook and restructuring efforts suggest a cautious but stable approach to navigating current market conditions.