The Home Depot - Q1 FY2026 Earnings Analysis

Performance Highlights

Home Depot delivered Q1 FY2026 total sales of $41.8 billion, up 4.8% year-over-year, with comparable sales of positive 0.6% and U.S. comps of positive 0.4%, both in line with internal expectations. Adjusted diluted EPS came in at $3.43, down 3.7% from $3.56 in the prior-year period, pressured by acquisition-related intangible amortization and a mix shift from the GMS acquisition that compressed gross margin by approximately 75 basis points to 33.0%.

Pro customers outperformed DIY for the quarter, with nine of sixteen merchandising departments posting positive comps and digital platform sales growing more than 10% for the fourth consecutive quarter. The Mingledorff's HVAC acquisition, completed last week, expands the company's specialty distribution reach into an approximately $100 billion addressable market, further enlarging the total addressable pro market to $1.2 trillion and reinforcing SRS's competitive positioning against peers by hundreds of basis points across roofing, pool, and landscape verticals.

Management Outlook and Forward Catalysts

Management reaffirmed full-year FY2026 guidance, targeting total sales growth of 2.5%–4.5%, comparable sales of flat to 2.0%, adjusted operating margin of 12.8%–13.0%, and adjusted diluted EPS growth of flat to 4% from $14.69. The back-half comp improvement is anchored on a return to normal storm activity rather than a meaningful recovery in underlying demand, with SRS expected to deliver mid-single-digit organic growth for the full year as prior-year storm-impacted compares ease.

Bulls will focus on sustained Pro market share gains, accelerating cross-sell momentum targeting a $400 million run rate in FY2026, and digital engagement driving incremental volume, while bears will watch whether elevated mortgage rates, weakening housing turnover, and tariff-driven cost pressures compress margins or force a guidance revision in the seasonally critical second quarter.