The Home Depot (HD) Q1 2027 earnings summary

Executive summary

• First quarter fiscal 2026 sales reached $41.8 billion, up 4.8% year-over-year, with comparable sales up 0.6% and U.S. comps up 0.4%.

• Net earnings were $3.3 billion, or $3.30 per diluted share, down from $3.4 billion and $3.45 per share in the prior year.

• Adjusted diluted EPS was $3.43, a 3.7% decrease year-over-year, in line with expectations.

• Pro segment outperformed DIY, with strong engagement in spring-related categories and positive comps in nine of sixteen merchandising departments.

• Digital/online sales grew over 10% year-over-year, marking the fourth consecutive quarter of double-digit growth and representing 16.5% of net sales.

Financial highlights

• Gross profit increased 2.4% to $13.8 billion; gross margin was 33%, down from 33.8% year-over-year, mainly due to the GMS acquisition.

• Operating margin was 11.9%, down from 12.9% last year; adjusted operating margin was 12.3%.

• Diluted EPS was $3.30, adjusted diluted EPS $3.43, both down year-over-year.

• Effective tax rate was 24.9%, up from 24.4% in Q1 2025.

• Inventory turnover ratio decreased to 4.2x from 4.3x; merchandise inventories stood at $27.3 billion, up $1.5 billion year-over-year.

Outlook and guidance

• Fiscal 2026 guidance reaffirmed: total sales growth of 2.5%–4.5%, comparable sales growth flat to 2.0%.

• Gross margin expected at 33.1%; operating margin 12.4%–12.6%; adjusted operating margin 12.8%–13.0%.

• Diluted and adjusted EPS expected to increase flat to 4% year-over-year; capital expenditures at 2.5% of sales.

• SRS expected to deliver mid-single-digit organic sales growth; 15 new stores and 40-50 new SRS locations planned.

• Effective tax rate targeted at 24.3%; net interest expense expected at $2.3 billion.