HD delivered its first positive total comp print in four quarters with total comparable sales +0.6% and U.S. comps +0.4%. Net sales reached $41.77B (+4.8% YoY with SRS contribution) and adjusted diluted EPS was $3.43, edging consensus of $3.41 — but down vs $3.56 prior year. Adjusted operating margin compressed roughly 100bps YoY to 11.9% on tariff/cost pressure. Management reaffirmed FY2026 guidance: comp flat-to-up 2%, total sales +2.5–4.5%, adjusted EPS flat to +4%, despite an uncertain consumer/housing backdrop.

Key Metrics Trends

Metric	Q1 2024	Q2 2024	Q3 2024	Q4 2024	Q1 2025	Q2 2025	Q3 2025	Q4 2025	Q1 2026
Comparable sales (total)	-2.8%	-3.3%	-1.3%	0.8%	-0.3%	1.0%	0.2%	0.4%	0.6%
U.S. comparable sales	-3.2%	-3.6%	-1.2%	1.3%	0.2%	1.4%	0.1%	0.3%	0.4%
Comp transactions	-1.5%	-2.2%	-0.6%	0.6%	-0.5%	-0.4%	-1.6%	-1.6%	-1.3%
Comp avg ticket	-1.3%	-1.3%	-0.8%	0.2%	0.3%	1.4%	1.8%	2.4%	2.2%
Net sales	$36.4B	$43.2B	$40.2B	$39.7B	$39.9B	$45.3B	$41.4B	$38.2B	$41.8B
Net sales YoY %	-	-	-	-	+9.4%	+4.9%	+2.8%	-3.8%	+4.8%
Operating income	$5.1B	$6.5B	$5.4B	$4.5B	$5.1B	$6.6B	$5.4B	$3.8B	$5.0B
Operating income YoY %	-	-	-	-	+1.1%	+0.3%	-1.2%	-14.4%	-3.0%
Adj operating margin	13.9%	15.1%	13.5%	11.3%	12.9%	14.5%	12.9%	10.1%	11.9%
Adj diluted EPS	$3.67	$4.67	$3.78	$3.13	$3.56	$4.68	$3.74	$2.72	$3.43
Adj diluted EPS YoY %	-	-	-	-	-3.0%	+0.2%	-1.1%	-13.1%	-3.7%

HD is showing tentative signs of stabilization: ticket has reaccelerated to +2.2%, the second consecutive quarter of positive total comps, and underlying demand was characterized as 'relatively similar' to fiscal 2025. But transactions remain negative (-1.3%), big-ticket discretionary remains pressured, and the reaffirmed guide implies a sharp 2H ramp to land in the comp range — making this a 'wait-and-see' tape.

Beat/Miss

Guidance

Catalysts

Street Q&A

Contradictions

Read-Throughs

This Quarter vs Consensus

Metric	Consensus	Actual	Variance	Beat/Miss
Adjusted diluted EPS	$3.41 Street consensus	$3.43	+$0.02 / +0.6%	Slight beat
Revenue	~$41.85B Street	$41.77B	+4.8% YoY (in-line)	In line
Comparable sales (total)	~0% to +0.5% expectation	+0.6%	Modest upside vs the flat bar	Beat
U.S. comps	~0% Street	+0.4%	Positive but modest	Slight beat
Adj operating margin	~12.6% comparable to Q1'25	11.9%	-100bps YoY	Miss on margin

Pattern: HD beat the low-bar Street expectations on the top line and comps, but profitability is the soft spot — adj op margin compressed ~100bps YoY despite top-line growth. The L8Q comp print has been mixed (range -3.3% to +1.0%), and the +0.6% this quarter is the second consecutive positive total comp. Magnitude is modest, not a clear inflection.

Guidance Deep Dive

Metric	Prior Guide (Feb '26)	New Guide (May '26)	Signal
Comp sales	Flat to +2%	Reaffirmed flat to +2%	No change despite Q1 +0.6% start
Total sales growth	+2.5% to +4.5%	Reaffirmed +2.5% to +4.5%	Includes ~53rd week + SRS
Gross margin	~33.1%	Reaffirmed ~33.1%	Q1 GM was 33.0% — flat with guide
Operating margin	12.4% to 12.6%	Reaffirmed 12.4–12.6%	Implies 2H step-up vs Q1 11.9%
Adjusted operating margin	12.8% to 13.0%	Reaffirmed 12.8–13.0%	Implies 2H reacceleration
Diluted EPS growth	Flat to +4%	Reaffirmed flat to +4%	Q1 adj EPS down YoY — 2H must turn

Management tone is steady-confident, not boastful. CEO Ted Decker characterized underlying demand as 'relatively similar' to fiscal 2025 even with consumer uncertainty and housing affordability pressure persisting. The decision to reaffirm rather than raise — despite a comp beat — signals respect for an unstable macro setup, especially tariffs and rates. Source: HD transcript 2026Q1.

Upcoming Catalysts

Catalyst	Timing	Consensus / Watch	Implication
Housing turnover	2026	Mortgage rates near 7% suppressing existing-home sales	Single biggest swing factor for Pro and big-ticket comps
Pro ecosystem (SRS, complex Pro)	Through FY2026	Pro outperformed DIY again; SRS integrating	Confirms strategic pivot toward Pro is intact
Tariffs / cost of goods	Ongoing 2026	Sourcing diversification + supplier negotiations cited	Pressuring GM/op margin; needs offsets to hit FY guide
Big-ticket discretionary (kitchens, baths)	2H 2026	Improving over course of year per mgmt commentary	Required to bend the 2H comp curve upward
Weather and seasonal	Q2 2026	Spring sell-through cited as 'when weather cooperated' (positive)	Q2 comp print key tell for trajectory

Street Q&A

Question	Management response	Assessment
Why reaffirm but not raise after a Q1 comp beat?	Mgmt cited consumer/housing uncertainty and tariff variability; preferred to keep guide unchanged.	Well answered — disciplined
What is the path to hitting flat-to-up 2% comp for the year?	Easier compares + housing stabilization + improving big-ticket as year progresses.	Partly answered — back-half dependent
How are tariffs flowing through to margin?	Sourcing diversification away from China continues; not all costs being absorbed.	Partly answered — quantification light
Pro vs DIY trends?	Pro outperformed DIY again; SRS integration progressing; complex Pro strategy intact.	Well answered
When does big-ticket discretionary recover?	Improving relative to last year, but full recovery tied to housing/rates.	Honest but non-committal

Contradictions

Indirect Read-Throughs

Theme	Commentary	Read-through
Big-box retail	HD comp +0.6% with ticket reaccelerating	Positive read-through for LOW, TSCO Pro/DIY exposure; watch LOW comp print
Housing turnover	Existing-home sales remain weak; rates near 7%	Negative read-through for housing-tied building product names (TREX, MAS, AZEK)
Pro ecosystem	Pro outperformed DIY; SRS integration on track	Supports Pro distribution thesis (POOL, FERG, FAST, WSO)
Tariffs / sourcing	Sourcing diversification continues; margin still pressured	Negative read-through for tariff-exposed importer retailers (WSM, RH, BBWI)
Consumer uncertainty	Underlying demand 'relatively similar' to FY25	Neutral-to-cautious read for broad consumer discretionary (TGT, WMT, COST)

Data sourced from Daloopa. Document search is currently in beta; transcript and filing snippets may vary.