Home Depot Q2 2026 Earnings Call Transcript
Key takeaways
- Home Depot’s Q2 sales and margins grew, but rising costs and a one‑time tariff refund signal a tighter operating environment moving forward.
- Sales Q2 2026: $47.9 billion (+5.7% YoY)
- Diluted EPS Q2 2026: $4.79 (+4.2% YoY)
- Operating margin Q2 2026: 14.3% (-0.2pp)
What happened
Home Depot (HD) reported Q2 2026 sales of $47.9 billion, up 5.7% YoY, and diluted EPS of $4.79, up from $4.58 in Q2 2025. Operating margin fell to 14.3% from 14.5%, while adjusted operating margin was 14.7% versus 14.8% last year. Gross margin rose to 33.7% from 33.2%, helped by a $685 million tariff refund that cut COGS by $685 million, a 145‑basis‑point gross‑impact. Inventory rose to $26.8 billion, inventory turns slipped to 4.5× from 4.6×. Return on invested capital declined to 24.8% from…
Why it matters
The results show Home Depot’s core business remains strong with solid sales and margin expansion, but the decline in operating and adjusted margins signals rising costs and a tighter operating environment. The $685 million tariff refund is a one‑time benefit that will be spread over Q2 and Q3, potentially dampening…
Short-term and longer-term
Short-term. Short‑term traders should watch the timing of the $685 million tariff refund, which will be spread over Q2 and Q3, potentially compressing Q3 margins.
Longer-term. Over the next few months, investors should monitor how Home Depot manages rising input costs and inventory levels, as well as the execution of its store‑experience and delivery initiatives.