Home improvement retail giant Home Depot (NYSE:HD) beat Wall Street’s revenue expectations in Q2 CY2026, with sales up 5.7% year on year to $47.86 billion. Its non-GAAP profit of $4.92 per share was 4% above analysts’ consensus estimates.
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Home Depot (HD) Q2 CY2026 Highlights:
- Revenue: $47.86 billion vs analyst estimates of $47.28 billion (5.7% year-on-year growth, 1.2% beat)
- Adjusted EPS: $4.92 vs analyst estimates of $4.73 (4% beat)
- Adjusted Operating Income: $7.02 billion vs analyst estimates of $6.77 billion (14.7% margin, 3.7% beat)
- Operating Margin: 14.3%, in line with the same quarter last year
- Free Cash Flow Margin: 9.4%, up from 8.2% in the same quarter last year
- Locations: 2,364 at quarter end, up from 2,353 in the same quarter last year
- Same-Store Sales rose 1.7% year on year, in line with the same quarter last year
- Market Capitalization: $336.9 billion
Company Overview
Founded and headquartered in Atlanta, Georgia, Home Depot (NYSE:HD) is a home improvement retailer that sells everything from tools to building materials to appliances.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $169.2 billion in revenue over the past 12 months, Home Depot is a behemoth in the consumer retail sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because it’s harder to find incremental growth when you’ve penetrated most of the market. For Home Depot to boost its sales, it likely needs to adjust its prices or lean into foreign markets.
As you can see below, Home Depot’s sales grew at a sluggish 3% compounded annual growth rate over the last three years as it didn’t open many new stores.
This quarter, Home Depot reported year-on-year revenue growth of 5.7%, and its $47.86 billion of revenue exceeded Wall Street’s estimates by 1.2%.
Looking ahead, sell-side analysts expect revenue to grow 3.2% over the next 12 months, similar to its three-year rate. This projection is above average for the sector and suggests its newer products will help support its historical top-line performance.
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Store Performance
Number of Stores
A retailer’s store count often determines how much revenue it can generate.
Home Depot listed 2,364 locations in the latest quarter and has kept its store count flat over the last two years while other consumer retail businesses have opted for growth.
When a retailer keeps its store footprint steady, it usually means demand is stable and it’s focusing on operational efficiency to increase profitability.
Same-Store Sales
The change in a company’s store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.
Home Depot’s demand within its existing locations has barely increased over the last two years as its same-store sales were flat. This performance isn’t ideal, and we’d be skeptical if Home Depot starts opening new stores to artificially boost revenue growth.
In the latest quarter, Home Depot’s same-store sales rose 1.7% year on year. This growth was an acceleration from its historical levels, which is always an encouraging sign.
Key Takeaways from Home Depot’s Q2 Results
It was encouraging to see Home Depot beat analysts’ gross margin expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $338.13 immediately after reporting.
So do we think Home Depot is an attractive buy at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).