home depot On Tuesday, the company said its core homeowner shopper remained resilient in the face of rising gas prices and plummeting consumer confidence, prompting the retailer to reaffirm its full-year outlook after beating expectations for the fiscal first quarter.
“Homeowners are relatively financially protected, probably more so than other customer groups, and we continue to see engagement,” Finance Director Richard MacPhail said in an interview on CNBC.
Still, these shoppers remain committed “up to a point,” McPhail said, amid rising geopolitical tensions, plummeting consumer confidence and a collapsing housing market.
“They keep telling us they’re going to defer spending on bigger projects,” he said. “That’s consistent with what they’ve been telling us for the last few years.”
Here’s how Home Depot’s earnings compare to Wall Street’s expectations, based on a survey of analysts by LSEG.
Earnings per share: $3.43 adjusted vs. $3.41 expected Revenue: $41.77 billion vs. $41.52 billion expected
The company reported net income of $3.29 billion, or $3.30 per share, for the three months ended May 3, compared with $3.43 billion, or $3.45 per share, in the year-ago period. Excluding one-time items, including charges related to the value of certain intangible assets, Home Depot reported adjusted earnings per share of $3.43.
Sales were $41.77 billion, an increase of about 5% from $39.86 billion in the same period last year.
LSEG said the company expects sales to continue to grow between 2.5% and 4.5% in fiscal 2026, compared to expectations of around 4%. LSEG said it expects adjusted earnings per share to increase by up to 4%, compared with expectations of 2.4%.
Home Depot’s report beat sales and bottom line results, but it comes after Wall Street expectations have declined in recent months, lowering the bar.
The report suggests that pressures affecting the company continued into the quarter. Sales increased amid the company’s M&A boom, but comparable sales were lower than expected at 0.6%. This was below the 0.8% expected by street accounts, and marked the third consecutive quarter in which the figure did not rise or fall by more than 0.5%.
According to Street Account, gross profit margin also fell below expectations at 33%, below expectations of 33.2%, resulting in a 1.3% decline in comparable transactions, marking the fourth consecutive quarterly decline.
Home Depot and the entire home improvement sector are under pressure in the face of declining home sales, economic uncertainty and continued delays in big-ticket projects.
There was optimism earlier this year that Home Depot would be given a reprieve as mortgage rates began to fall, but those hopes were dashed when the Middle East conflict began and mortgage rates soared again.
Meanwhile, Home Depot is focused on attracting more professional shoppers, such as contractors and roofers, who currently account for about 50% of the company’s revenue. In 2024, the company acquired SRS Distribution, which sells supplies to roofing, landscaping and pool professionals, for $18.25 billion, and last year it acquired specialty building products distributor GMS.
Last week, SRS completed the acquisition of Mingledorff’s, a wholesaler of HVAC equipment, parts and supplies serving residential and commercial customers. The deal gives Home Depot access to an addressable market totaling about $100 billion, the company said.
“Everything we’re doing to strengthen our professional capabilities and through the acquisitions we’ve made over the past few years will help us capture a larger share of the $700 billion professional market,” MacPhail said. “We have the right to win that $700 billion, but we don’t have the ability to win yet.”
