Home Depot's FY26 Earnings Outlook: Signs of a Turnaround?
The Home Depot Inc.’s HD first-quarter fiscal 2026 results suggest that the home improvement giant may be showing early signs of stabilization, even as housing-market headwinds persist. In the quarter, sales increased 4.8% year over year to $41.8 billion, while comparable sales rose 0.6%, marking a return to positive comps growth. Although adjusted earnings per share (EPS) declined 3.7% to $3.43, management emphasized that results were in line with expectations and reflected a demand environment similar to that seen throughout fiscal 2025.
A notable positive was the resilience of Home Depot’s Pro business, which outperformed DIY customers in the fiscal first quarter. The company also reported positive comparable sales in nine of its 16 merchandising departments, including power, plumbing, paint and electrical. Big-ticket transactions above $1,000 increased 0.8%, though larger discretionary projects remained pressured by elevated interest rates and housing affordability challenges.
Strategic investments continue to support Home Depot’s long-term growth outlook. Online sales grew more than 10% year over year, marking the fourth consecutive quarter of double-digit digital growth. The company is also expanding its Pro ecosystem through acquisitions such as Mingledorff’s and leveraging SRS Distribution to deepen its presence in specialty trade categories, including roofing, HVAC and building materials. These initiatives are designed to capture a larger share of the $700-billion Pro market and drive sustained market-share gains.
While management does not expect a significant improvement in underlying demand this year, it reaffirmed its fiscal 2026 guidance and expects comparable sales growth of flat to 2%, alongside earnings growth of flat to 4%. With positive comps, strong Pro momentum and continued strategic execution, Home Depot appears positioned for a gradual earnings recovery as market conditions normalize.
How Are Peers Like LOW & WSM Catching Up?
While Home Depot continues to strengthen its Pro and omnichannel strategies, peers Lowe’s Companies Inc.LOW and Williams-Sonoma Inc.WSM are executing initiatives aimed at driving market share gains and narrowing the competitive gap.
Lowe’s fiscal 2026 outlook shows early signs of stabilization, supported by positive comps, Pro momentum and digital gains. In first-quarter fiscal 2026, sales rose 10.3% to $23.1 billion, comps increased 0.6% and adjusted EPS grew 3.8% to $3.03. Management reaffirmed its fiscal 2026 guidance for sales of $92-$94 billion, flat to 2% comps and an adjusted EPS of $12.25-$12.75 despite DIY softness and housing pressures.
Williams-Sonoma’s fiscal 2026 outlook reflects sustained momentum rather than a turnaround story. The company delivered 4.8% comparable-brand revenue growth, a 16.2% operating margin and 4% EPS growth in the first quarter of fiscal 2026, driven by strength across all brands, channels and product categories. Management reaffirmed its fiscal 2026 guidance for 2-6% comps growth and operating margin of 17.5-18.1%, citing market-share gains, product innovation, supply-chain efficiencies and disciplined cost management despite housing-market and macroeconomic uncertainty.
HD’s Price Performance, Valuation & Estimates
Shares of Home Depot have lost 6.9% in the past six months versus the industry’s decline of 8.2%.
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From a valuation standpoint, HD trades at a forward price-to-earnings ratio of 21.25X compared with the industry’s average of 19.67X.
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The Zacks Consensus Estimate for HD’s fiscal 2026 and fiscal 2027 EPS implies year-over-year growth of 2.2% and 8%, respectively. The company’s EPS estimates for fiscal 2026 and 2027 have moved down 0.3% and 0.9%, respectively, in the past 30 days.
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Home Depot currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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