Home Depot Inc (HD) Q1 2026 Earnings Call Transcript
Neutral Home Improvement 374.73B USA
Next Earnings
2026-05-19
There is no Profile data available for HDI.SG.
Home Depot reaffirmed 2026 guidance with flat-to-2% comp growth and 2.5%-4.5% total sales growth, while expanding the Pro ecosystem and integrating GMS/SRS.
⭐ Key Highlights
FY2025 results and 2026 guidance
Sales rose 3.2% to $164.7B; 2026 guidance calls for 2.5%-4.5% total sales growth and flat-to-2% comp growth.
GMS acquisition impact and SRS expansion
GMS integration reduced gross margin modestly and added inventory; SRS/GMS combined are expected to drive mid-single-digit organic sales growth in 2026 with revenue synergies.
Pro ecosystem and digital investments
Continued expansion of Pro tools, AI-based project takeoffs, improved order management, and live delivery tracking support Pro growth and delivery reliability.
Pro and in-store experience focus
Organizational changes (MET, unified Pro team, experience manager) improved associate engagement, Pro sales, and customer satisfaction across the network.
Capital allocation and dividends
Board raised quarterly dividend by 1.3% to $2.33; long-term plan prioritizes reinvestment in stores and capability-building before returning excess cash to shareholders.
✔Positive Signals
- Pro ecosystem expansion with AI takeoffs and enhanced project management tools
- Delivery reliability improvements and real-time tracking for big/bulky deliveries
- SRS and GMS integration creating cross-selling opportunities and revenue synergies
- Record-setting Gift Center and Black Friday events contributing to top-line momentum
- Dividend increase and disciplined capital allocation prioritizing reinvestment
✖Negative Signals
- GMS acquisition pressure on gross margin and higher cost base
- 2025 53rd week distorting year-over-year comparisons (adjustments made in reporting)
- Lower forward-looking EPS in Q1 due to annualization of the GMS impact
- Macro housing headwinds and consumer uncertainty weighing on demand
- Inventory up year over year driven by GMS integration and tariff-related costs
📊Financial Results
- Fiscal 2025 sales $164.7B, up 3.2% YoY; company comp sales up 0.3% for the year and U.S. comps up 0.5%
- Q4 2025 diluted EPS $2.58 (GAAP), down 14.6% YoY; adjusted EPS $2.72 (ex-intangibles amortization), down 13.1%
- Full-year gross margin ~33.3% (down 10 bps YoY); Q4 gross margin ~32.6% (down ~20 bps QoQ)
- Operating margin: Q4 10.1% (adjusted 10.5%); full-year 12.7% (adjusted 13.1%)
- ROIC ~25.7% for the year, down from 31.3% in Q4 2024
🔮Future Guidance
- Fiscal 2026: total sales growth ~2.5%-4.5%; comps flat to +2%
- Fiscal 2026: gross margin ~33.1%; operating margin ~12.4%-12.6%; adjusted operating margin ~12.8%-13%
- EPS to increase approximately flat to +4% vs. 2025 (adjusted basis similar range)
- Capex planned at ~2.5% of sales for 2026
- SRS expected to deliver mid-single-digit organic sales growth in 2026; ~15 new stores and 40-50 SRS locations
💡Interesting Insights
- AI-enabled 'takeoff' project planning tools and bid/price optimization for Pro customers signal a shift toward AI-assisted B2B selling
Detailed Analysis
AI-generated summary of Home Depot Inc earnings call transcript.
Home Depot delivered 2025 sales of $164.7 billion (+3.2%); comps were roughly flat in the U.S. and the year benefited from storm-related activity earlier in 2025, with underlying demand stable. The company highlighted strong Pro momentum, improved delivery and order-management capabilities, and AI-enabled tools for project planning. GMS acquisition increased inventories and pressured gross margins modestly, while SRS presses for mid-single-digit organic growth in 2026 through revenue synergies with GMS and cross-selling opportunities. The 2026 outlook features total sales growth of ~2.5%-4.5% and comps flat to +2%, with adjusted EPS expected to be flat to up 4% and gross margin around 33.1%, supported by continued investments in stores, interconnected shopping, and the Pro ecosystem. The company also signaled a continued bias toward reinvesting in the business before returning excess cash to shareholders, including a dividend increase announced in the quarter.
Get Real-Time Earnings Call Alerts for Home Depot Inc
Create a free MarketAlerts account to add HD to your watchlist and receive instant AI-powered alerts when new earnings call transcripts, insider trades, and technical signals are detected.
Other MarketAlerts Features
