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

The Home Depot reported mixed results for fiscal 2026 Q3, with revenue rising 2.8% year-over-year to $41.35 billion but EPS declining 1.4% to $3.63. The company maintained its full-year 2026 guidance of 4.5–5.5% revenue growth and 8–10% EPS expansion, signaling confidence in long-term resilience despite near-term headwinds.

Revenue

The Home Depot’s revenue growth in Q3 2026 was driven by robust performance across its core segments. Building Materials led the charge with $13.60 billion in sales, while Decor contributed $12.94 billion, reflecting sustained demand for home improvement projects. Hardlines added $10.93 billion, and Other net sales totaled $3.89 billion. Collectively, these segments underscored the retailer’s ability to capitalize on macroeconomic tailwinds, particularly in outdoor and renovation categories.

Earnings/Net Income

Despite the revenue increase, The Home Depot’s earnings contracted slightly. Net income fell to $3.60 billion in Q3 2026, a 1.3% decline from $3.65 billion in the prior year, while EPS dropped to $3.63 from $3.68. The decline reflects ongoing cost pressures and supply chain challenges, though the company’s ability to maintain profitability for over two decades highlights its operational resilience.

Price Action

The stock’s post-earnings performance was volatile, with a 3.56% rise in the latest trading day and a 4.34% gain over the past week. However, the month-to-date decline of 9.21% underscored investor caution.

Post-Earnings Price Action Review

The strategy of buying HD after earnings beats and holding for 30 days underperformed the benchmark, yielding a 17.88% return versus 80.96%, resulting in a -63.08% excess return. While the Sharpe ratio of 0.14 and 0.00% maximum drawdown suggest low risk, the 23.91% volatility indicates significant fluctuations. The 3.36% CAGR further highlights the strategy’s conservative growth potential.

CEO Commentary

CEO Craig Menard emphasized the company’s focus on inventory optimization and digital transformation to mitigate supply chain headwinds. He reiterated confidence in the fourth quarter, stating, “We’re prioritizing long-term value over short-term gains by expanding Pro solutions and accelerating sustainability initiatives.”

Guidance

The Home Depot reaffirmed its full-year 2026 guidance, targeting revenue growth of 4.5–5.5% and EPS expansion of 8–10%. Capital expenditures are expected to allocate 12% of revenue toward store remodels and technology upgrades, reflecting disciplined cost management and strategic reinvestment.

Additional News

Institutional investors increased stakes in The Home Depot during Q2 2026, with Northwest & Ethical Investments L.P. raising its position by 188% and J.W. Cole Advisors Inc. boosting holdings by 61.7%. Analysts also adjusted price targets, including Bank of America reducing its target to $430 and Royal Bank of Canada to $376. Meanwhile, insider William D. Bastek sold 2,303 shares, marking an 8.68% reduction in his ownership.

Key Institutional Investors:

• Northwest & Ethical Investments L.P.: Acquired 19,416 additional shares, raising its stake to 29,742 shares.

• J.W. Cole Advisors Inc.: Increased holdings by 61.7%, now owning 69,131 shares.

• Vanguard Group Inc.: Boosted its position by 1.5%, holding 97,978,814 shares.

Analyst Price Targets:

• Bank of America: Cut target to $430 (“Buy”).

• Royal Bank of Canada: Reduced target to $376 (“Sector Perform”).

• Truist Financial: Set target at $379.

Insider Activity:

• William D. Bastek (EVP) sold 2,303 shares at $423.12, reducing his stake to 24,235 shares.

The company also announced a $2.30 quarterly dividend, yielding 2.7%, with a payout ratio of 62.71%.