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The Home Depot 2026 Q1 Earnings Revenue Surges 9.4% Despite EPS Decline
Generated by AI AgentAinvest Earnings Report Digest
Thursday, May 29, 2025 7:12 am ET2min read
The (HD), ranking 25th by market capitalization, reported its fiscal 2026 Q1 earnings on May 28th, 2025. The company's total revenue increased to $39.86 billion, marking a 9.4% rise from the previous year. Earnings per share (EPS) declined to $3.46, down from $3.64 in 2025 Q1. reaffirmed its fiscal 2025 guidance, projecting a 2.8% total sales growth and a 1.0% increase in comparable sales. Analysts noted challenges due to high interest rates but praised the company's strategic positioning.
Revenue
The Home Depot's revenue for 2026 Q1 climbed 9.4% to reach $39.86 billion, a significant improvement from $36.42 billion in the previous year's Q1. The Building Materials segment led with $12.93 billion, followed closely by the Décor segment at $12.48 billion. The Hardlines segment contributed $11.88 billion, while other net sales accounted for $2.57 billion, reflecting strong performance across various product categories.
Earnings/Net Income
The Home Depot's EPS saw a decline of 4.9%, falling to $3.46 from $3.64 in the previous year. Net income similarly decreased by 4.6% to $3.43 billion from $3.60 billion. The earnings decline suggests the company is facing challenges despite its historical profitability.
Price Action
The stock price of The Home Depot fell slightly by 0.21% during the latest trading day and decreased by 2.38% over the past week. However, the stock has risen 2.93% month-to-date.
Post-Earnings Price Action Review
A historical strategy of buying Home Depot shares when revenue misses and holding for 30 days has historically yielded a 38.25% return, underperforming the benchmark return of 86.09%. This strategy resulted in an excess return of -47.84% with a compound annual growth rate (CAGR) of 6.73%. The approach had a Sharpe ratio of 0.28, indicating a moderate risk-adjusted return, while experiencing a maximum drawdown of -41.55% and volatility of 24.39%. These metrics highlight the challenges and risks associated with this trading strategy, emphasizing the importance of careful consideration before engaging in such investment decisions.
CEO Commentary
Ted Decker, CEO of The Home Depot, expressed satisfaction with the company's first-quarter performance, highlighting a 9.4% increase in sales to $39.9 billion driven by strong customer engagement in smaller projects. He acknowledged challenges, notably "stubbornly high" interest rates affecting larger home improvement expenditures, yet remained optimistic about the company's readiness for the spring season. Decker emphasized the importance of maintaining current pricing levels, indicating that this strategy, alongside a diversified supply chain, positions Home Depot well to capture market share amid economic uncertainties.
Guidance
The Home Depot reaffirms its fiscal 2025 guidance with total sales growth projected at approximately 2.8% and comparable sales growth of around 1.0%. The company anticipates diluted earnings per share to decline by about 3% from the previous year. Additionally, it plans capital expenditures of approximately 2.5% of total sales, with forecasts for gross margin at around 33.4% and operating margin near 13.0%.
Additional News
In recent developments, The Home Depot declared a first-quarter dividend of $2.30, maintaining its commitment to returning value to shareholders. In leadership news, the company nominated Asha Sharma for election to its board of directors at the upcoming 2025 annual meeting. Additionally, The Home Depot expanded its selection of tax-free products for military shoppers, showcasing its dedication to serving diverse customer segments. These moves highlight the company's strategy to enhance shareholder value, strengthen governance, and cater to the needs of specific customer demographics.
Revenue
The Home Depot's revenue for 2026 Q1 climbed 9.4% to reach $39.86 billion, a significant improvement from $36.42 billion in the previous year's Q1. The Building Materials segment led with $12.93 billion, followed closely by the Décor segment at $12.48 billion. The Hardlines segment contributed $11.88 billion, while other net sales accounted for $2.57 billion, reflecting strong performance across various product categories.
Earnings/Net Income
The Home Depot's EPS saw a decline of 4.9%, falling to $3.46 from $3.64 in the previous year. Net income similarly decreased by 4.6% to $3.43 billion from $3.60 billion. The earnings decline suggests the company is facing challenges despite its historical profitability.
Price Action
The stock price of The Home Depot fell slightly by 0.21% during the latest trading day and decreased by 2.38% over the past week. However, the stock has risen 2.93% month-to-date.
Post-Earnings Price Action Review
A historical strategy of buying Home Depot shares when revenue misses and holding for 30 days has historically yielded a 38.25% return, underperforming the benchmark return of 86.09%. This strategy resulted in an excess return of -47.84% with a compound annual growth rate (CAGR) of 6.73%. The approach had a Sharpe ratio of 0.28, indicating a moderate risk-adjusted return, while experiencing a maximum drawdown of -41.55% and volatility of 24.39%. These metrics highlight the challenges and risks associated with this trading strategy, emphasizing the importance of careful consideration before engaging in such investment decisions.
CEO Commentary
Ted Decker, CEO of The Home Depot, expressed satisfaction with the company's first-quarter performance, highlighting a 9.4% increase in sales to $39.9 billion driven by strong customer engagement in smaller projects. He acknowledged challenges, notably "stubbornly high" interest rates affecting larger home improvement expenditures, yet remained optimistic about the company's readiness for the spring season. Decker emphasized the importance of maintaining current pricing levels, indicating that this strategy, alongside a diversified supply chain, positions Home Depot well to capture market share amid economic uncertainties.
Guidance
The Home Depot reaffirms its fiscal 2025 guidance with total sales growth projected at approximately 2.8% and comparable sales growth of around 1.0%. The company anticipates diluted earnings per share to decline by about 3% from the previous year. Additionally, it plans capital expenditures of approximately 2.5% of total sales, with forecasts for gross margin at around 33.4% and operating margin near 13.0%.
Additional News
In recent developments, The Home Depot declared a first-quarter dividend of $2.30, maintaining its commitment to returning value to shareholders. In leadership news, the company nominated Asha Sharma for election to its board of directors at the upcoming 2025 annual meeting. Additionally, The Home Depot expanded its selection of tax-free products for military shoppers, showcasing its dedication to serving diverse customer segments. These moves highlight the company's strategy to enhance shareholder value, strengthen governance, and cater to the needs of specific customer demographics.
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