Home Depot Q1 2026 Earnings Beat

CNBC reported Tuesday that Home Depot posted better-than-expected fiscal first-quarter results, with revenue climbing nearly 5% year-over-year. The home improvement giant reaffirmed its full-year outlook despite persistent headwinds from weak consumer confidence and a sluggish housing market.

Earnings Beat a Lowered Bar

Home Depot earnings came in at $3.43 adjusted earnings per share against a Wall Street forecast of $3.41. Revenue reached $41.77 billion, edging past expectations of $41.52 billion. Net income for the quarter ending May 3 fell to $3.29 billion from $3.43 billion in the same period last year.

Comparable sales rose just 0.6%, trailing StreetAccount’s estimate of 0.8%. Comparable transactions declined 1.3%, marking the fourth consecutive quarter of that metric falling. Gross margin also missed slightly at 33%, below the anticipated 33.2%.

Analysts had gradually lowered their forecasts in recent months, making the beat somewhat easier to achieve.

Background: Housing Woes Drag On

Home Depot has faced a multi-year squeeze from lower housing turnover and elevated mortgage rates. Early 2026 brought brief optimism when borrowing costs began easing, but renewed geopolitical tensions pushed mortgage rates back up, dampening expectations for a housing recovery.

Shoppers continue deferring bigger-ticket renovation projects, a pattern Home Depot finance chief Richard McPhail said has been consistent for several years. He noted that homeowners remain financially better positioned than many other consumer groups, keeping them engaged with the retailer up to a point.

Pro Customers Drive the Growth Strategy

With residential demand soft, Home Depot has aggressively pursued professional contractors and tradespeople, a segment now representing roughly half of total revenue. The company’s $18.25 billion acquisition of SRS Distribution in 2024 expanded its reach into roofing, landscaping, and pool supply professionals.

Last week, SRS completed the purchase of Mingledorff’s, a wholesale HVAC distributor serving residential and commercial clients. Home Depot said the move gives it access to a roughly $100 billion addressable market. McPhail described the broader professional segment as a $700 billion opportunity the company is actively building toward capturing.

Guidance Holds Steady

Home Depot maintained its fiscal 2026 forecast, projecting sales growth of 2.5% to 4.5%. Adjusted earnings per share are expected to grow as much as 4%, ahead of the 2.4% analysts had penciled in. The reaffirmed outlook signals management confidence despite an uncertain macro backdrop marked by elevated gas prices and falling consumer sentiment.

Read Next: Fed Holds Rates Steady as Inflation Progress Stalls