The Home Depot (HD) Q4 2026 earnings summary

Executive summary

• Fiscal 2025 sales reached $164.7 billion, up 3.2% year-over-year, with comparable sales up 0.3% overall and 0.5% in the U.S.; Q4 sales were $38.2 billion, down 3.8% due to a shorter quarter, with comps up 0.4%.

• Adjusted diluted EPS for the year was $14.69, down 3.6% year-over-year; Q4 adjusted EPS was $2.72, down 13.1%.

• Net earnings for Q4 were $2.6 billion ($2.58 per diluted share), and for the year $14.2 billion ($14.23 per diluted share).

• Market share gains were driven by strong Pro engagement, digital enhancements, and successful events.

• Quarterly dividend increased by 1.3% to $2.33 per share, marking the 156th consecutive quarterly dividend.

Financial highlights

• Gross margin for the year was 33.3%, down 10 bps; Q4 gross margin was 32.6%, down 20 bps, mainly due to GMS acquisition mix.

• Operating margin for the year was 12.7% (adjusted 13.1%), down from 13.5% (adjusted 13.8%) in 2024.

• Q4 operating income was $3.85 billion (down 14.4%); fiscal year operating income was $20.9 billion (down 3.0%).

• Inventory at year-end was $25.8 billion, up $2.4 billion, reflecting GMS acquisition and higher costs.

• Return on invested capital was 25.7%, down from 31.3% last year.

Outlook and guidance

• Fiscal 2026 guidance: total sales growth of 2.5%-4.5%, comp sales flat to 2%, adjusted EPS growth flat to 4%.

• Gross margin expected at 33.1%, operating margin 12.4%-12.6%, adjusted operating margin 12.8%-13%.

• Capital expenditures targeted at 2.5% of sales; 15 new stores and 40-50 new SRS locations planned.

• SRS organic sales expected to grow mid-single digits.

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