Home Depot’s second quarter of fiscal 2026 delivered $47.9 billion in net sales and $4.8 billion in net earnings, or $4.79 a diluted share, up from $4.58 a year earlier. For the first six months, net sales reached $89.6 billion and net earnings were $8.1 billion, or $8.09 a share.
The quarter’s top line rose 5.7% from $45.3 billion, with management pointing to $1.4 billion of incremental sales from GMS, acquired Sept. 4, 2025, plus Mingledorff’s, new stores and branches, and a positive comparable sales environment. A weaker U.S. dollar added $105 million to second-quarter sales. Online sales accounted for 16.6% of net sales and increased 11.0% year over year.
Comparable sales rose 1.7% in the quarter, driven by a 2.8% increase in average ticket to $92.50, partly offset by a 1.0% decline in customer transactions to 443.2 million. For the first half, comparable sales were up 1.2%, with average ticket up 2.5% to $92.62 and transactions down 1.2% to 834.3 million.
Gross profit in the quarter climbed to $16.1 billion from $15.1 billion, and gross margin widened to 33.7% from 33.4%. Management said the margin benefit from IEEPA tariff refunds was largely offset by higher fuel, energy and other product input costs, plus the inclusion of GMS. During the quarter, Home Depot received about $730 million in IEEPA tariff refunds, with about $685 million recognized as a reduction of cost of goods sold and the rest recorded as a reduction of inventory cost, nearly all in the Primary segment.
Operating expenses rose faster than sales. SG&A increased 8.5% to $8.4 billion, lifting SG&A to 17.6% of sales from 17.1%. Depreciation and amortization rose 5.7% to $852 million. Operating income increased to $6.8 billion from $6.6 billion, but operating margin slipped to 14.3% from 14.5%.
For the first six months, SG&A rose to $16.4 billion from $15.3 billion, and operating income edged up to $11.8 billion from $11.7 billion. Gross margin for the half-year was 33.4%, down from 33.6%, with management citing GMS and higher input costs, partly offset by tariff refunds.
Interest and other net expense was $524 million in the quarter versus $550 million a year ago, helped by higher interest income tied to the tariff refunds. For the first half, interest and other net was $1.128 billion, essentially flat year over year. The effective tax rate was 24.5% in the quarter and 24.7% for the half.
Cash generation remained substantial. Home Depot produced $11.4 billion of operating cash flow in the first six months, then used cash and on-hand liquidity to pay $4.6 billion in dividends, repay $3.0 billion of long-term debt, fund $1.7 billion of capital expenditures, and spend $1.3 billion on acquisitions. In February 2026, the quarterly dividend was raised 1.3% to $2.33 per share.
The company opened three U.S. stores in the quarter, bringing total store count to 2,364 at Aug. 2, 2026. Of those, 325 stores, or 13.7%, were in Canada and Mexico. Home Depot also said it operated more than 1,340 locations within its SRS non-reportable operating segments across the U.S. and Canada.
Inventory turnover was 4.5 times at quarter-end, down from 4.6 times a year earlier. Return on invested capital was 24.8% for the trailing 12 months, compared with 27.2% a year earlier, with the decline attributed mainly to higher average equity from the ongoing pause in share repurchases. Today the company's shares have moved -0.64% to a price of $335.265. If you want to know more, read the company's complete 10-Q report here.
