The Home Depot (HD) Q1 2027 earnings summary

Executive summary

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

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

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

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

• Results aligned with expectations amid ongoing consumer uncertainty and housing affordability pressures.

Financial highlights

• Gross margin was approximately 33%, down 75 basis points 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, a 3.7% decrease year-over-year.

• Customer transactions fell 0.9% to 391.1 million, while average ticket rose 2.3% to $92.76.

• Net cash from operating activities was $6.0 billion, up from $4.3 billion in the prior year.

Outlook and guidance

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

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

• Gross margin projected at 33.1%; operating margin 12.4%-12.6%; adjusted operating margin 12.8%-13%.

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

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