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HOME DEPOT, INC. (HD)·Q3 2026 Earnings Summary

Executive Summary

  • Q3 2026 sales were $41.35B (+2.8% y/y), with comps +0.2% (U.S. +0.1%); adjusted EPS was $3.74 and GAAP EPS was $3.62, with results below management’s internal expectations due primarily to an unusual lack of storm activity and ongoing housing/consumer uncertainty .
  • Versus S&P Global consensus, revenue modestly beat while EPS missed: revenue $41.35B vs $41.12B consensus; adjusted/Primary EPS $3.74 vs $3.83 consensus* .
  • FY2025 guidance was lowered on margins and EPS and updated for GMS inclusion: gross margin ~33.2% (prior ~33.4%), operating margin ~12.6% (prior ~13.0%), adjusted operating margin ~13.0% (prior ~13.4%), diluted EPS down ~6% y/y (prior ~3%), adj. EPS down ~5% (prior ~2%); total sales growth raised to ~3.0% (from ~2.8%) with ~$2.0B contribution from GMS .
  • Strategic execution continued: digital comp +11%, 400 bps improvement in customer satisfaction from faster fulfillment, and launch of an AI-powered Blueprint Takeoffs tool for Pros, reinforcing the Pro ecosystem and share gains despite macro headwinds .

What Went Well and What Went Wrong

  • What Went Well

    • Digital strength and CX: online comp sales rose ~11%; faster fulfillment and tech investments drove “record in-stock and on-shelf availability” and a >400 bps increase in customer satisfaction scores .
    • Pro momentum and share gains: management reiterated confidence in share gains; big-ticket transactions >$1,000 were +2.3%, supported by Pro initiatives and managed accounts .
    • International and category breadth: Canada and Mexico posted positive comps (local currency); nine of 16 departments posted positive comps, including kitchen, bath, garden, storage, electrical, plumbing, millwork, hardware, appliances .

  • What Went Wrong

    • Weather-driven shortfall: Lack of storms was the primary driver of the miss vs internal expectations, pressuring categories like roofing, power generation and plywood; Q3 comps slowed into October (-1.5%) .
    • Macro/housing headwinds: Consumer uncertainty and housing turnover at multi-decade lows weighed on discretionary large projects and financing-sensitive categories; Pro backlogs softened from prior “months out” levels .
    • Margin deleverage/mix: Operating margin fell to 12.9% (13.3% adj.) with ~55 bps opex deleverage; transaction fees tied to GMS and wholesale mix (SRS/GMS) diluted margin structure; ROIC fell to 26.3% (from 31.5%) .

Financial Results

MetricQ1 2026Q2 2026Q3 2026
Revenue ($USD Billions)$39.86 $45.28 $41.35
GAAP Diluted EPS ($)$3.45 $4.58 $3.62
Adjusted Diluted EPS ($)$3.56 $4.68 $3.74
Operating Margin (%)12.9% 14.5% 12.9%
Total Company Comps (%)-0.3% +1.0% +0.2%
U.S. Comps (%)+0.2% +1.4% +0.1%

Estimates vs Actuals (Q3 2026):

  • Revenue: Actual $41.35B vs Consensus $41.12B*
  • Primary/Adjusted EPS: Actual $3.74 vs Consensus $3.83*
    *Values retrieved from S&P Global.

Segment/Category Notes (Q3 2026):

  • Department comps: positive in kitchen, bath, outdoor garden, storage, electrical, plumbing, millwork, hardware, appliances .
  • Digital: online comp sales +~11% .
  • Monthly comp cadence: Aug +2.0%, Sept +0.5%, Oct -1.5%; U.S. Aug +2.2%, Sept +0.3%, Oct -1.7% .

KPIs

KPIQ1 2026Q2 2026Q3 2026
Comparable Customer Transactions (%)N/A-0.4% -1.6%
Comparable Average Ticket (%)N/A+1.4% +1.8%
Online Comp Sales GrowthN/AN/A+~11%
Big-ticket Transactions >$1,000N/AN/A+2.3%

Note: Q1/Q2 comp ticket and transactions are disclosed; online and big-ticket metrics were disclosed for Q3 only .

Guidance Changes

MetricPeriodPrevious Guidance (Q2 release, Aug 19)Current Guidance (Q3 release, Nov 18)Change
Total Sales GrowthFY2025~+2.8% ~+3.0% (incl. ~$2.0B from GMS) Raised (GMS-driven)
Comparable SalesFY2025 (52 wks)~+1.0% Slightly positive Lowered
New StoresFY2025~13 ~12 Lowered
Gross MarginFY2025~33.4% ~33.2% Lowered
Operating MarginFY2025~13.0% ~12.6% Lowered
Adjusted Operating MarginFY2025~13.4% ~13.0% Lowered
Tax RateFY2025~24.5% ~24.5% Maintained
Net Interest ExpenseFY2025~$2.2B ~$2.3B Raised
Diluted EPS (GAAP)FY2025~-3% vs FY2024 $14.91 ~-6% vs FY2024 $14.91 Lowered
Adjusted Diluted EPSFY2025~-2% vs FY2024 $15.24 ~-5% vs FY2024 $15.24 Lowered
CapexFY2025~2.5% of sales ~2.5% of sales Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3 2026)Trend
AI/Technology & Pro toolsFocus on spring events and execution; reaffirmed FY25 guide (no AI callouts in releases) Launched AI-powered Blueprint Takeoffs to accelerate Pro estimating; new Pro project planning tool Expanding AI-enabled Pro ecosystem
Supply chain / FulfillmentExecution and store readiness Faster fulfillment drove >400 bps CSAT increase; record in-stock/on-shelf availability Improving service levels
Tariffs/Macro PricingN/ATook moderate tariff-related price moves; elasticity impact TBD; promotional environment similar y/y Managing pricing to “protect the project”
Demand & WeatherQ1/Q2 momentum in smaller projects; comps modestly positive in Q2 Lack of storms pressured comps/categories; underlying demand ~flat vs Q2 after weather adjust Weather a key negative variance
Housing/ConsumerN/AHousing turnover at ~40-year lows; consumer uncertainty weighing on big projects; Pro backlogs easing Persistent headwind
Regional trendsN/ACanada & Mexico positive comps in local currency Int’l stable/positive
Wholesale mix (SRS/GMS)Q2 guide included SRS impact SRS/GMS mix dilutes margins (pro forma ~120 bps GM, ~60 bps OM); Q4 more seasonal swing Mix headwind near-term; synergy upside long-term

Management Commentary

  • “Our results missed our expectations primarily due to the lack of storms in the third quarter… We believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand.” — Ted Decker, CEO .
  • “Our faster fulfillment efforts… have driven an over 400 basis point increase in our customer satisfaction scores… [and] record in-stock and on-shelf availability levels.” — Ann-Marie Campbell, Senior EVP .
  • “Our operating margin for the third quarter was 12.9%… Excluding intangible asset amortization… adjusted operating margin… 13.3%… online comp sales increased approximately 11%.” — Richard McPhail, CFO .
  • “GMS further enhances SRS’s position… bringing differentiated capabilities… highly complementary… we believe we are growing market share.” — Ted Decker, CEO .

Q&A Highlights

  • Weather and underlying demand: Management quantified storm impact as primary driver of shortfall; underlying demand similar to Q2 when storm-normalized; further storm pressure expected in Q4 y/y .
  • GMS/SRS and margins: FY adjusted operating margin guide lowered by 40 bps; ~20 bps FY OM impact from GMS (incl. transaction fees) and deleverage from lower comps; wholesale mix (SRS, GMS) structurally dilutes margins near-term; Q4 has seasonal low for SRS/GMS .
  • Pricing/promotions: Implemented moderate tariff-related price moves to “protect the project”; promo environment consistent y/y; elasticity assessment ongoing .
  • Big-ticket vs projects: Big-ticket +2.3% driven by appliances, tools, and Pro share gains; not a leading indicator for large discretionary projects, which remain pressured by financing/housing .
  • Pro ecosystem and growth: Cross-sell examples between HD, SRS, and GMS; branch growth expected to continue (40–50 per year pace historically for SRS/GMS) with tuck-ins; long-term mid-single-digit growth expected for SRS; majority re-roof exposure .

Estimates Context

  • Q3 2026: Revenue modestly beat consensus ($41.35B actual vs $41.12B consensus*), but EPS missed ($3.74 actual vs $3.83 consensus*). Given lower FY margin/EPS guidance and weather risk into Q4, sell-side EPS estimates for FY2025–FY2026 likely need to adjust lower, especially on operating margin trajectory and interest expense run-rate .
    *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: Expect continued weather headwinds into Q4 and wholesale seasonality to pressure margins; EPS revisions likely drift lower given guide-down and mix effects; watch for December 9 investor day catalysts on Pro ecosystem and synergy capture .
  • Medium-term: AI-enabled Pro tools (Blueprint Takeoffs), faster fulfillment, and cross-sell with SRS/GMS support share gains even in a muted housing backdrop; underlying demand ex-storm stable q/q .
  • Margin mix: Wholesale adds scale and TAM, but dilutes margin percent near-term (pro forma impact ~120 bps gross, ~60 bps operating); synergy and volume can offset over time .
  • Balance sheet/returns: ROIC of 26.3% remains strong though down y/y; inventory up with GMS inclusion and speed investments; dividend remains a core capital return lever .
  • Category/geo pulse: Nine departments positive comps; Canada/Mexico positive in local currency; big-ticket +2.3% reflects share gains vs project recovery .
  • Watch items: Storm pattern normalization, housing turnover, tariff elasticity, and momentum in digital/service levels as primary drivers of narrative and multiple re-rating into 2026 .