Read the transaction count, not the headline.
Home Depot reported $47,861 million in second-quarter net sales Tuesday, up 5.7 percent — a $2.6 billion increase. Comparable sales rose 1.7 percent, U.S. comps 1.3 percent. Underneath that: comparable customer transactions fell 1.0 percent, and average ticket rose 2.8 percent to $92.50 from $90.01. Total customer transactions were 443.2 million, down 0.8 percent.
Smaller Projects, Bigger Receipts
CFO Richard McPhail said results “exceeded our expectations” and that the company “saw broad based demand across the business as customers continued to engage in smaller projects.” That phrasing is doing real work. Homeowners are doing bathroom-scale jobs, not additions, and the sales line is holding on ticket inflation rather than on more people walking through the door.
Put it next to the July housing data released the same morning, starts down 12.4 percent, and the 2026 residential picture resolves. Ground-up is contracting. Repair and remodel is holding, barely, and only on price. The volume is moving into large adaptive-reuse work instead, like the Flatiron Building condominium conversion.
Costs Are Moving Faster Than Sales
Gross profit rose 6.5 percent to $16,115 million. SG&A rose 8.5 percent to $8,424 million, outrunning both. Operating income was up 4.3 percent to $6,839 million, but operating margin slipped to 14.3 percent from 14.5, and adjusted margin to 14.7 from 14.8. Net earnings came in at $4,766 million, or $4.79 per diluted share; adjusted diluted EPS of $4.92 was up 5.1 percent.
Home Depot reaffirmed full-year guidance: 2.5 to 4.5 percent sales growth, comps flat to plus 2.0 percent, roughly 15 new stores, 33.1 percent gross margin and 12.8 to 13.0 percent adjusted operating margin.
The Footnote That Should Get More Attention
Buried in the guidance language: it “includes IEEPA tariff refunds, which are expected to partially offset unplanned fuel, energy, and other product input costs throughout the fiscal year.” The largest building-products buyer in the country is holding a 13 percent margin partly on the expectation that tariff refunds land. The company did not quantify them.
That’s a contingent line item sitting directly upstream of what contractors pay for material. If the refunds are smaller or slower than assumed, the pressure goes somewhere, and historically it goes into price.
The growth that is working is on the pro side of the house, through the SRS Distribution and GMS channels rather than the orange aisles. Six-month payments for businesses acquired hit $1,333 million against $233 million a year ago, and SRS-related intangible amortization ran $125 million in the quarter alone. Home Depot now operates 2,364 retail stores and over 1,340 SRS locations. It did not break out pro segment sales.