Aug 18, 2026 earnings call — Express Delivery launch and quarterly results
Home Depot reported second-quarter sales of $47.9 billion and reaffirmed its fiscal 2026 guidance.
Revenue $47.9B (est $47.2B) · EPS $4.92 (est $4.73)
Key quotes
"In fact, this month, we launched Express Delivery nationwide with delivery on tens of thousands of products in 3 hours or less."
"During the second quarter, Pro posted positive comps and outperformed DIY."
"The $685 million reduction in COGS was about 145 basis point gross impact to margin."
Analyst Q&A 10
category strength and tariff refunds
Q (Charles Grom · Gordon Haskett): He asked which parts of the business were strongest in the quarter and for detail on the $685 million tariff refund — how much hit COGS in 2Q versus prior quarters, any more refunds, and the margin lap into next year.
A: Management said 13 of 16 categories had positive comps and the middle of the store (electrical, plumbing, hardware, tools) was especially strong both in-store and online. They said they received $730 million in refunds, of which $685 million reduced COGS for sold products and $45 million remains in inventory. They expect an immaterial additional refund, the refunds helped Q2 margin but incremental cost pressures will offset the benefit over the year, and they reaffirmed full-year guidance with no annual lap into 2027.
"Of that $730 million, $685 million reduced our cost of goods sold as they applied to products that had already been sold." — Richard McPhail (CFO)
cost pressure and interest rates
Q (Scot Ciccarelli · Truist): He asked if the incremental 60 basis points of cost pressure should be assumed for 3Q and 4Q, and whether higher interest rates are still hurting demand.
A: Management said the tariff refunds will offset costs mainly across Q2 and Q3 and they expect gross margin in Q4 to be roughly flat versus last year. On rates, they said recent rate moves have not caused much volatility and there is no clear sign of a housing inflection point today.
"I think what we would expect to see is that our gross margin rate in the fourth quarter will likely be right around flat compared to last year." — Richard McPhail (CFO)
U.S. vs total comps and SRS performance
Q (Seth Sigman · Barclays): He asked why total company comp diverged from U.S. comp, whether SRS comps were positive, and for color on international results.
A: Management said the gap included a 25 basis point FX benefit and strong performances in Canada, Mexico and SRS. Canada accelerated with positive transactions and units; Mexico continued a strong run. SRS comped above the company average and was positive across all verticals and is taking share.
"SRS comped above the company average this quarter." — Richard McPhail (CFO)
market share, digital and gross margin drivers
Q (Michael Lasser · UBS): He asked how much of the quarter's acceleration was market share versus market recovery and for evidence customers are reengaging (app, quotes, Magic Apron). He also asked what drove the 117 bps gross margin pressure excluding tariff refunds and what is ongoing versus one-time.
A: Management said the teams took share in a tough market and stores drove the performance. Digital engagement rose: online grew, the app was the fastest-growing digital surface, Magic Apron has millions of questions per month and a localized store-aware version is being built; Express Delivery rolled out nationwide for very fast fulfillment. On gross margin, they said roughly 120 bps pressure comprised about 60 bps of increased cost (offset by tariff refunds) and about 60 bps from acquisition mix (GMS and Mingledorff's).
"60 basis points of that is in the form of increased cost that we were able to offset with tariff refunds." — Richard McPhail (CFO)
ticket (AUR) drivers
Q (Katharine McShane · Goldman Sachs): She asked what drove the ticket increase — how much was same-SKU price (AUR) versus categories or mix — and whether sustained ticket plus better traffic would push comps to the high end.
A: Management said there was some same-SKU AUR from cost inputs, and big single-purchase categories (refrigeration, portable power, patio, riders) and intra-category trading up boosted ticket. They agreed the math would support stronger comps if ticket holds and traffic improves, but volatility remains so guidance was set prudently and will be reviewed at end of Q3.
"There was some same SKU, AUR, as we've talked about previously on calls based on some of the cost inputs and so forth." — William Bastek
monthly weather effects and SRS contribution
Q (Christopher Horvers · JPMorgan): He asked how monthly weather patterns affected 2Q cadence and whether SRS contribution will widen the gap between U.S. and total comps in the back half. He also asked about any SG&A shift into 2Q and how fuel/energy affects 2027.
A: Billy said timing of extreme heat and a bad weather week moved some demand between June and July, and when you adjust for that the months align. Richard said SRS was pressured by low storm activity in late 2025 but has accelerated and they expect mid-single-digit organic growth for the year. Ann said QuoteCenter sales facilitated by SRS are growing fast and 90% of stores closed a sale through SRS in the last 12 months. On expenses, they noted lumpy items like FIFA marketing but reaffirmed guidance and a clean starting point into 2027.
"Within the last 12 months, 90% of our stores have closed a sale through SRS." — Ann-Marie Campbell
AUR outlook and org realignment reason
Q (Zhihan Ma · Bernstein): He asked how AUR should be thought about for the back half and whether price reinvestment is needed. He also asked why the company reorganized and why now.
A: William said the AUR outlook and any related effects are already factored into their back-half guidance and they see no change to prior messaging. Richard said the organizational changes are to better align the company to strategy, so they can work smarter, move faster and innovate.
"I think that, that's factored into our guide for the back half of the year that Richard talked about a little bit earlier." — William Bastek
cross-sell between SRS and GMS
Q (Zachary Fadem · Wells Fargo): He asked how the expected $400 million of cross-sell builds through the year, what Q2 showed, and what to expect in the second half.
A: Richard said $400 million is the amount they expect for the year and emphasized cross-sell across the whole system starting with in-store Pro penetration. Ann said most sales start with the in-store Pro and investments in staffing, tools and capabilities are driving traction and deeper wallet share with Pros.
"Well, that's the amount we expect through the year." — Richard McPhail (CFO)
Pro order, delivery and digital tools
Q (Michael Rowe): (Follow-up prompt) What specific investments and tools are being built to win more Pro business and improve deliveries and order management?
A: Management said they have invested in order management and delivery capabilities and achieved the highest levels of on-time and complete for flatbed and box truck deliveries with strong customer satisfaction. They listed tools like self-service site instructions, capturing Pro hours, delivery tracking, Project Planning, an AI Material List Builder, search and app improvements, and a store SRS purchase card rollout to win more Pro wallet share.
gross margin timing and fuel/freight nature
Q (Zachary Fadem · Wells Fargo): He asked whether the ~60 basis points of fuel and freight pressure is transitory or a longer-term base cost, and how that bridges Q2 to the rest of the year.
A: Richard said the market-borne product input and fuel/energy pressures are incremental and the tariff refunds created a timing benefit seen in Q2 that will be partly offset in Q3. He reiterated that by Q4 they expect gross margin to be relatively flat versus last year.
"And then, again, just to repeat it, by Q4, we expect that we will see our gross margin to be relatively flat versus last year." — Richard McPhail (CFO)