The Home Depot, Inc.

Second-quarter sales were $47.9 billion, up 5.7% year over year, with comp sales up 1.7% and U.S. comps up 1.3%. Adjusted diluted EPS was $4.92 versus $4.68 last year; reported EPS was $4.79 versus $4.58. Gross margin was 33.7%, up about 25 basis points, and operating margin was 14.3% versus 14.5% last year; adjusted operating margin was 14.7% versus 14.8%. Tariff refunds totaled $730 million in the quarter, with $685 million reducing COGS and $45 million remaining in inventory. For fiscal 2026, Home Depot reaffirmed comp sales of flat to 2%, total sales growth of approximately 2.5% to 4.5%, gross margin of about 33.1%, operating margin of 12.4% to 12.6%, adjusted operating margin of 12.8% to 13%, and EPS/adjusted EPS up approximately flat to 4%.

Richard McPhail said the quarter exceeded expectations and emphasized that the company is focused on what it can control: driving the core and culture, improving the interconnected experience, and winning with the Pro. He stressed that customers are still engaging in home improvement projects, but larger discretionary projects remain pressured by consumer uncertainty and housing affordability. His tone was confident but cautious, with repeated references to volatility and a commitment to continued share gains.

McPhail provided the key financial bridge: gross margin of 33.7% benefited from tariff refunds, which reduced COGS by $685 million, but that was largely offset by fuel, energy, and other product input costs plus acquisition mix. Operating expense rose to 19.4% of sales, operating margin was 14.3%, and adjusted diluted EPS was $4.92, up 5.1%. He also noted $880 million of capex in the quarter, $2.3 billion in dividends, inventories of $26.8 billion, and ROIC of 24.8%.

Analysts pressed on the breadth of demand, tariff refund timing, whether higher rates are hurting demand, and how much of the comp acceleration reflected Home Depot-specific share gains versus a broader market rebound. Management said the business took share in a difficult environment, with broad-based strength across the middle of the store, strong Pro performance, and positive engagement in digital tools like the app and Magic Apron. They also clarified that $730 million of tariff refunds were received, $685 million hit COGS, and the remaining $45 million stays in inventory, while higher rates have not created a clear inflection in housing turnover.