The Home Depot (HD) Q3 2026 earnings summary

Executive summary

• Third quarter sales reached $41.4 billion, up 2.8% year-over-year, with comp sales up 0.2% and U.S. comps up 0.1%; net earnings were $3.6 billion, diluted EPS $3.62, and adjusted EPS $3.74, both slightly down year-over-year.

• GMS acquisition contributed $900 million in sales for the quarter and is expected to add $2 billion in incremental sales for fiscal 2025.

• Company continues to invest in operational efficiency, digital platforms, and pro customer tools, aiming to grow market share.

• Three new stores opened, bringing the total to 2,356; 13.7% of stores are in Canada and Mexico.

• Inventory turnover ratio declined to 4.5 from 4.8, driven by higher average inventory levels.

Financial highlights

• Gross margin was 33.4%, flat year-over-year; operating margin declined to 12.9% from 13.5%; adjusted operating margin was 13.3%.

• Net earnings for Q3 were $3.6 billion; diluted EPS $3.62, adjusted EPS $3.74, both slightly down year-over-year.

• SG&A expenses rose 5.9% in Q3, reflecting higher payroll and acquisition costs.

• Merchandise inventories increased to $26.2 billion, up $2.3 billion year-over-year.

• Return on invested capital was 26.3%, down from 31.5% last year.

Outlook and guidance

• Fiscal 2025 sales growth expected at approximately 3%, with comp sales slightly positive.

• GMS acquisition projected to add $2 billion in incremental sales.

• Gross margin forecasted at 33.2%, operating margin at 12.6%, and adjusted operating margin at 13%.

• Diluted EPS expected to decline about 6%, adjusted EPS to decline about 5% versus fiscal 2024, due to 52-week vs. 53-week comparison.

• Capital expenditures planned at 2.5% of sales, or approximately $4 billion.