The Home Depot 2026 Q3 Earnings Revenue Rises 2.8% Amid EPS Decline

The Home Depot (HD) reported mixed Q3 2026 results, with revenue rising 2.8% to $41.35 billion but EPS declining 1.4% to $3.63. While the top-line growth outperformed expectations, the earnings miss and muted guidance adjustments highlight ongoing margin pressures. The company raised full-year revenue forecasts to 3% growth, slightly above prior estimates, but acknowledged near-term challenges in traffic and cost management.

Revenue

The Primary segment, encompassing building materials, décor, and hardlines, generated $37.5 billion in net sales, while the "Other" category, including roofing and building products, contributed $3.9 billion. U.S. sales accounted for $38.1 billion, with international revenue at $3.2 billion. Online sales surged 11.4% year-over-year, representing 15.2% of total revenue.

Earnings/Net Income

Net income fell 1.3% to $3.60 billion, with diluted EPS at $3.63, reflecting higher payroll costs and acquisition expenses. Despite robust revenue growth, the 1.4% EPS decline underscores the impact of macroeconomic uncertainties and inflationary pressures.

Post-Earnings Price Action Review

The stock surged 3.56% in the latest trading day but slid 9.21% month-to-date. A post-earnings trading strategy—buying HD after a beat and holding for 30 days—yielded 17.88% returns, underperforming the benchmark’s 80.96% gain. The strategy’s low Sharpe ratio (0.14) and 23.91% volatility highlight its risk profile, while a 3.36% CAGR suggests conservative growth potential.

CEO Commentary

Chairman and CEO Craig Menard emphasized resilience in a challenging retail environment, stating, “Our focus on customer-centric innovation and Pro customer investments is driving long-term value.” He highlighted the 2.8% revenue growth as evidence of the company’s ability to adapt, despite weaker traffic metrics. Menard also noted, “We remain committed to balancing growth with disciplined cost management,” signaling cautious optimism for fiscal 2027.

Guidance

The Home Depot raised full-year revenue guidance to 3% growth, slightly above its prior 2.8% target. The company anticipates “slightly positive” same-store sales growth for 2026, down from earlier expectations, and reiterated its commitment to $4 billion in capital expenditures for store expansions and digital enhancements.

Additional News

Telsey Advisory cut its price target for HD to $430 from $455, maintaining an Outperform rating, citing the company’s long-term retail dominance despite near-term challenges. Meanwhile, Southeast Asset Advisors disclosed a $2.58 million stake in HD, reflecting confidence in its market position. Morgan Stanley also reduced its price target to $395, retaining an Overweight rating, as analysts debate the stock’s short-term volatility versus its durable business model.