Small projects lift Home Depot quarterly sales, but outlook unchanged in
a slumping housing market
[August 19, 2026] By
MICHELLE CHAPMAN
Home Depot’s sales improved during its second quarter as customers
focused on smaller projects during the summer months with the U.S.
housing sector still mired in a slump.
Revenue increased to $47.86 billion from $45.28 billion, edging out the
$47.24 billion that Wall Street had expected, according to a survey by
FactSet.
Globally, sales at stores open at least a year, a key indicator of a
retailer’s health, climbed 1.7%. In the U.S., comparable store sales
rose 1.3%.
“We saw broad based demand across the business as customers continued to
engage in smaller projects,” Chief Financial Officer Richard McPhail
said in prepared remarks Tuesday.
Customer transactions slipped 1% in the quarter, but the amount shoppers
spent rose to $92.50 per average receipt from $90.01 a year earlier.
Healthy spending on smaller projects during the quarter is encouraging,
said Neil Saunders, managing director of GlobalData.
“From our data, the number of smaller projects undertaken during the
quarter increased by 1.5% over the prior year,” Saunders said in an
email. “This may sound unimpressive, but it represents a step change
from the declines of previous periods."
But Saunders also pointed out a potential weakness that is impacting
almost all businesses where credit is sometimes required.
“The number of bigger-ticket projects undertaken remains down, falling
by 2.1% over last year,” he said. "Concerns around financing and a
previous lack of moving activity both remain major drags on the
bigger-ticket segment.”
Homeowners that are currently considering taking out loans using home
equity are realizing that it is considerably more expensive now compared
with the ultra-low rates Americans could count on in the early 2020s. A
home project that seemed within reach at a 4% to 5% borrowing rate looks
a lot more daunting at 8% or higher.
McPhail remains upbeat about Home Depot’s ability to navigate current
conditions.
“While consumer uncertainty and housing affordability continue to
pressure demand for larger home improvement projects, we remain focused
on what we can control,” he said during the company’s conference call.
While the average long-term U.S. mortgage rate fell slightly for the
first time in six weeks, it is still up from last year and borrowing
costs remain steeper than they were a year ago.
The U.S. housing market has been in a slump dating back to 2022, the
year mortgage rates began climbing from historic lows that fueled a
homebuying frenzy at the start of this decade.
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Exterior view of a Home Depot in Uniontown, Pa., on Friday, June 5,
2026. (AP Photo/Gene J. Puskar, File)
 Sales of previously occupied U.S.
homes slowed again in July as record prices and the highest mortgage
rates in a year prove to be an insurmountable hurdle for many
prospective buyers. Existing home sales fell 1.7% last month from
June, the National Association of Realtors said last week.
Home prices continue to rise and hit unprecedented levels for the
month of July, NAR said. The U.S. median sales price increased 2%
from a year earlier, to $434,100.
For the three months ended Aug. 2, Home Depot earned $4.77 billion,
or $4.79 per share. A year earlier the home improvement retailer
earned $4.55 billion, or $4.58 per share.
Excluding one-time items, earnings were $4.92 per share. That’s much
better than the $4.73 per share that Wall Street predicted.
McPhail, along with Ann-Marie Campbell, senior executive vice
president, are overseeing operations while CEO Ted Decker takes a
temporary medical leave of absence. The company said last week that
it expects Decker to return within the next few months.
Home Depot also announced Tuesday that it is launching express
delivery nationwide. The service will get orders to customers within
three hours or less. It will be available for a small flat fee in
the U.S., with no subscription or membership required.
The Atlanta company has posted solid back-to-back quarterly
performances this year though many Americans have struggled to buy a
home. Despite the solid performance, Home Depot stuck with its
earlier sales growth guidance for fiscal 2026 of between 2.5% and
4.5%. It also left unchanged its expectations that comparable sales
will be flat to up 2%.
Home Depot said that its outlook includes tariff refunds, which are
expected to partially offset higher fuel, energy, and other product
input costs throughout the year. Last year, the company said that it
didn't expect to raise prices because of tariffs, but executive
Billy Bastek said at the time that some products that were on Home
Depot shelves may disappear.
McPhail said during the call that Home Depot received $730 million
in tariff refunds. Of that, $685 million was put towards lowering
the cost of goods sold.
The company's stock rose nearly 2% Tuesday.
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