Home Depot's first-quarter earnings call had a clear message: the rest of 2026 will be decided by the weather, not by a sudden burst of consumer enthusiasm. The home improvement giant reported sales of $41.8 billion, up 4.8% from last year, with comparable sales rising 0.6% overall and 0.4% in the U.S. But CEO Ted Decker was blunt about what's driving the second-half optimism. It's not that people are suddenly flocking to remodel their kitchens. It's that the company is betting on a normal hurricane season.
"Expectations for a stronger second-half performance are solely driven by a return to normal storm activity," Decker said on the call. That's a pretty honest way of saying: we're not counting on you to fix up your deck; we're counting on Mother Nature to break some windows.
Weather already played a role in the quarter. Management noted that comparable sales weakened during the final two weeks of April due to unfavorable conditions, though May trends have normalized. The company reaffirmed its fiscal 2026 guidance for flat-to-2% comparable sales growth and total sales growth of 2.5% to 4.5%. So the range is wide, and storms will determine where they land.
Cost Pressures and Margin Impact Remain in Focus
It's not just about selling more stuff; it's about keeping what you make on each sale. Management said fuel, tariff, and commodity costs have shifted to a negative bias since last quarter. That's a fancy way of saying input costs are rising again. There is a potential silver lining: tariff refunds could partly offset those pressures, but that's not guaranteed.
Adjusted diluted earnings per share fell to $3.43 from $3.56 a year earlier, as operating margins continued to feel the squeeze from the GMS acquisition. The company also faced direct questions from investors about share buybacks, but management didn't provide a timeline. Instead, they emphasized the dividend as the primary tool for returning capital to shareholders. Translation: don't expect a big buyback announcement anytime soon.
Pro Strategy and Execution Investments Continue
Home Depot is leaning hard into its Pro customers—the contractors, builders, and tradespeople who buy in bulk and come back regularly. The company is investing in trade credit, delivery reliability, digital tools, and jobsite fulfillment. And it's working: Pro comparable sales outperformed DIY again this quarter.
One interesting detail: the $400 million cross-sell run rate from the SRS acquisition mostly consists of guaranteed contracts, including SRS doing roofing work on Home Depot's own warehouses. The company has a target to double that figure by 2027. So they're not just selling to Pros; they're using their own operations as a showcase.
Merchandising execution teams are now active in more than 1,000 stores, driving higher customer engagement across additional departments. And the company highlighted the Mingledorf acquisition, with plans for more HVAC distribution bolt-on deals under SRS. It's a steady, methodical expansion into adjacent categories.
HD Price Action: Home Depot shares were up 0.65% at $301.76 at the time of publication on Tuesday. The stock is trading near its 52-week low of $296.88. So the market isn't exactly throwing a party, but the stock is holding its ground. For now, all eyes are on the Atlantic hurricane forecast.
