The Home Depot, Inc.

Second-quarter sales were $47.9 billion, up 5.7% year over year. Comparable sales increased 1.7% overall and 1.3% in the U.S. Adjusted diluted EPS was $4.92, versus $4.68 a year ago; reported diluted EPS was $4.79 versus $4.58. Gross margin was 33.7%, up about 25 basis points year over year, driven mainly by tariff refunds, partly offset by higher fuel, energy, and other input costs and acquisition mix. Operating margin was 14.3%, and adjusted operating margin was 14.7%. For the full year, Home Depot reaffirmed guidance for comp sales of flat to 2%, total sales growth of about 2.5% to 4.5%, gross margin of about 33.1%, operating margin of about 12.4% to 12.6%, adjusted operating margin of about 12.8% to 13%, and diluted EPS and adjusted diluted EPS growth of approximately flat to 4%. The company also expects SRS to deliver mid-single-digit organic sales growth, about 15 new stores, 40 to 50 new SRS branches, and capex of about 2.5% of sales.

Richard McPhail’s tone was confident but measured. He said the quarter exceeded expectations and emphasized that Home Depot is focused on what it can control: core execution, a frictionless interconnected experience, and winning with Pro customers. He also acknowledged consumer uncertainty, housing affordability pressure, and a “frozen” housing backdrop, while stressing that the company believes it is taking share and building momentum through its investments.

McPhail gave detailed margin and tax context, saying Home Depot received $730 million of tariff refunds in the quarter, with $685 million reducing cost of goods sold and $45 million remaining in inventory. He said the refunds created about 145 basis points of gross margin benefit, offset by roughly 60 basis points of higher costs and about 60 basis points of mix pressure from GMS and Mingledorff’s, resulting in 33.7% gross margin and 25 basis points of year-over-year improvement. He also cited operating expense at 19.4% of sales, adjusted operating margin of 14.7%, inventory of $26.8 billion, inventory turns of 4.5x, capex of about $880 million in the quarter, dividends of about $2.3 billion, and ROIC of 24.8%.

Analysts focused on whether Q2 strength reflected share gains or broader demand improvement, and management said the headline was that Home Depot took share in a difficult market. On costs and tariffs, management said the tariff refund benefit is largely a Q2/Q3 timing issue and that full-year guidance remains unchanged because higher fuel, energy, and product input costs are expected to offset it. Questions also covered the gap between total and U.S. comps, where management pointed to FX, strong Canada and Mexico performance, and SRS outperformance, plus questions on digital engagement and Express Delivery, where the company said app traffic, conversion, and Magic Apron usage are all growing meaningfully.