Do Home Depot's results reflect the strength of the American consumer❓🛒

Home Depot (HD.US) kicked off its 2026 financial year with results which — whilst not spectacular — say more about the market than many a macroeconomic indicator. The company generated revenue of $41.77 billion, representing a 4.8% year-on-year increase and slightly beating consensus estimates. Adjusted earnings per share came in at $3.43 against an expected $3.41 — a modest result, but above the line. In an environment where consumers are tightening their purse strings, every cent above estimates counts.

The key takeaway, however, is not so much the result itself as the fact that the full-year forecast has been confirmed. Home Depot continues to forecast comparable sales growth of 0–2% and EPS growth of 0–4%. This sounds modest, but in an environment of rising interest rates, pressure on the housing market and consumer uncertainty — maintaining guidance is an act of courage and a clear signal to the market. For the sector, this is an optimistic message: the company sees demand stabilising, rather than continuing to collapse.

Behind these figures, however, lies something more significant — a snapshot of the average American. Home Depot is neither a luxury nor a technology company — it is a barometer of the state of the US middle class. When people are renovating their bathrooms, replacing their roofs or modernising their kitchens, it means they have jobs, they have savings and, most importantly, they have confidence in their financial situation. The 2.3% year-on-year increase in the average receipt value (to $92.76) suggests that customers are not shying away from larger purchases, even though the number of transactions fell slightly by 0.9%. In other words: they are buying less frequently, but not cheaper — this is behaviour characteristic of a cautious, not a discouraged, consumer.

Pressure on the property market and mortgage interest rates remain a real burden. CEO Ted Decker openly admitted that the company is feeling the effects of consumer uncertainty and the barrier to housing affordability — which explains why the results were “in line with expectations” rather than spectacular. Comparable sales in the US rose by a mere 0.4%, well below the estimated 0.88%. This is the only blemish on the picture. The property market remains frozen by high interest rates — owners are not selling because they do not want to lose the low interest rates from before 2022, which means that property turnover is low, and with it, demand for renovation is falling.

Nevertheless, taken as a whole, Home Depot’s results paint a picture of an economy that refuses to give in. The company generates over $6 billion in operating cash flow in a single quarter, maintains a gross margin of 33%, pays out $2.32 billion in dividends and plans to open 15 new stores this year. 

In short:

KEY FINANCIAL FIGURES FOR THE FIRST QUARTER OF 2026

🔹 Revenue: $41.77 billion (forecast: $41.51 billion) 🟢; +4.8% y/y
🔹 Adjusted earnings per share: $3.43 (forecast: $3.41) 🟢
🔹 Like-for-like sales: +0.6% (forecast +0.9%) 🔴
🔹 US same-store sales: +0.4%
🔹 Net profit: $3.3 billion

Forecast for the 2026 financial year:
🔹 Like-for-like sales growth: from the base level to +2.0% (forecast +1.55%) 🟡
🔹 Sales growth: from +2.5% to +4.5%, confirmed
🔹 Adjusted EPS growth: from base level to +4.0%, confirmed
🔹 New stores: ~15
🔹 Adjusted operating margin: 12.8%–13.0%

Comment:
🔸 “The results for the first quarter were in line with our expectations.”

🔸 “Underlying demand in our sector was broadly similar to that seen throughout the 2025 financial year, despite greater consumer uncertainty and pressures relating to housing availability.”

The company’s shares are trading flat in pre-market trading. The initial slight gains have been erased for the time being, and HD shares are now trading around 0.75% below yesterday’s close. 

Home Depot is testing a strong support level at around $299–$300. The RSI(14), currently at 32.7, is approaching oversold territory (below 30), although the price remains well below all three EMAs (50/100/200). Source: xStation