Home improvement retail giant Home Depot (NYSE: HD) met Wall Street’s revenue expectations in Q1 CY2026, with sales up 4.8% year on year to $41.77 billion. Its non-GAAP profit of $3.43 per share was 0.7% above analysts’ consensus estimates.
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Home Depot (HD) Q1 CY2026 Highlights:
- Revenue: $41.77 billion vs analyst estimates of $41.63 billion (4.8% year-on-year growth, in line)
- Adjusted EPS: $3.43 vs analyst estimates of $3.41 (0.7% beat)
- Adjusted EBITDA: $6.07 billion vs analyst estimates of $5.90 billion (14.5% margin, 2.8% beat)
- Operating Margin: 11.9%, in line with the same quarter last year
- Free Cash Flow Margin: 12.4%, up from 8.8% in the same quarter last year
- Locations: 2,361 at quarter end, up from 2,350 in the same quarter last year
- Same-Store Sales were flat year on year, in line with the same quarter last year
- Market Capitalization: $298.6 billion
"Our first quarter results were in line with our expectations. The underlying demand in our business was relatively similar to what we saw throughout fiscal 2025, despite greater consumer uncertainty and housing affordability pressure," said Ted Decker, chair, president and CEO.
Company Overview
Founded and headquartered in Atlanta, Georgia, Home Depot (NYSE: HD) is a home improvement retailer that sells everything from tools to building materials to appliances.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $166.6 billion in revenue over the past 12 months, Home Depot is a behemoth in the consumer retail sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because there are only a finite number of places to build new stores, making it harder to find incremental growth. To expand meaningfully, Home Depot likely needs to tweak its prices or enter new markets.
As you can see below, Home Depot’s sales grew at a sluggish 2.3% compounded annual growth rate over the last three years as it didn’t open many new stores.
This quarter, Home Depot grew its revenue by 4.8% year on year, and its $41.77 billion of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 3.8% over the next 12 months, an acceleration versus the last three years. This projection is above the sector average and suggests its newer products will catalyze better top-line performance.
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Store Performance
Number of Stores
Home Depot operated 2,361 locations in the latest quarter, and over the last two years, has kept its store count flat while other consumer retail businesses have opted for growth.
When a retailer keeps its store footprint steady, it usually means demand is stable and it’s focusing on operational efficiency to increase profitability.
Same-Store Sales
The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year.
Home Depot’s demand within its existing locations has barely increased over the last two years as its same-store sales were flat. This performance isn’t ideal, and we’d be skeptical if Home Depot starts opening new stores to artificially boost revenue growth.
In the latest quarter, Home Depot’s year on year same-store sales were flat. This performance was more or less in line with its historical levels.
Key Takeaways from Home Depot’s Q1 Results
It was encouraging to see Home Depot beat analysts’ EBITDA expectations this quarter. On the other hand, its gross margin slightly missed. Overall, this print had some key positives. The stock remained flat at $302.50 immediately after reporting.
Is Home Depot an attractive investment opportunity at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
