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

The Home Depot reported mixed results for its fiscal 2026 Q3, with revenue growth outpacing earnings contraction. While total revenue rose 2.8% to $41.35 billion, EPS fell 1.4% year-over-year. The company maintained its long-term profitability streak, and updated guidance for Q4 2026 EPS above $3.80 and low-single-digit full-year revenue growth.

Revenue

Driven by new store openings and higher average ticket sizes, The Home Depot’s total revenue grew 2.8% to $41.35 billion in 2026 Q3. Building Materials contributed $13.60 billion, with Decor and Hardlines segments generating $12.94 billion and $10.93 billion, respectively. Other net sales added $3.89 billion, rounding out the revenue breakdown.

Earnings/Net Income

The company’s EPS declined to $3.63 in 2026 Q3, a 1.4% drop from $3.68 in the prior year, while net income fell 1.3% to $3.60 billion. Despite these declines, The Home Depot has maintained profitability for over two decades in the same quarter, reflecting operational resilience.

Price Action

The stock price of The Home Depot climbed 3.56% in the latest trading day and 4.34% over the past week, though it declined 9.21% month-to-date.

Post-Earnings Price Action Review

The strategy of buying HD when earnings beat and holding for 30 days yielded a 17.88% return, significantly underperforming the benchmark’s 80.96% gain, resulting in a -63.08% excess return. While the Sharpe ratio of 0.14 suggests reasonable risk-adjusted returns and no significant drawdowns, the high volatility of 23.91% highlights market fluctuations that may deter stability-seeking investors.

CEO Commentary

CEO Craig Menear emphasized resilience amid macroeconomic challenges, citing strong customer traffic and improved basket sizes. Strategic priorities include digital commerce investments, expanding high-demand product categories, and enhancing in-store experiences. Menear stressed operational efficiency and disciplined capital allocation to navigate uncertainties.

Guidance

The company expects Q4 2026 EPS to exceed $3.80, with full-year revenue growth targeting low-single-digit increases. Capital expenditures remain capped at $2.1 billion, prioritizing store remodels and technology upgrades. Menear highlighted cautious inventory management and cost optimization as key to sustaining competitive advantage.

Additional News

Telsey Advisory cut its price target for HD to $430 from $455 while retaining an “Outperform” rating, citing Home Depot’s long-term retail sector dominance. Institutional investors, including J.W. Cole Advisors Inc. and Vanguard Group Inc., increased stakes in the company, with J.W. Cole’s holdings rising 61.7% in Q2. Meanwhile, Home Depot’s EPS of $3.74 in Q3 fell short of analysts’ $3.83 estimate, prompting mixed analyst reactions, including price target reductions from Bank of America and Royal Bank of Canada.