Home improvement retailer Home Depot, Inc. reported Tuesday lower first-quarter earnings, hurt by higher expenses, even as net sales and comparable sales were higher. Further, the firm maintained fiscal 2026 outlook.
In pre-market activity on the NYSE, the shares were gaining around 0.7 percent, trading at $302.25.
Ted Decker, chair, president and CEO, said, "Our first quarter results were in line with our expectations. The underlying demand in our business was relatively similar to what we saw throughout fiscal 2025, despite greater consumer uncertainty and housing affordability pressure."
Looking ahead for fiscal 2026, the company continues ot expect earnings per share and adjusted earnings per share to grow approximately flat to 4.0 percent from prior year's $14.23 and $14.69, respectively.
Operating margin is still expected to be around 12.4 percent to 12.6 percent, and adjusted operating margin to be approximately 12.8 percent to 13.0 percent.
The company also reaffirmed outlook for total sales growth of approximately 2.5 percent to 4.5 percent, and comparable sales growth of approximately flat to 2.0 percent.
In the first quarter, net earnings dropped 4.2 percent to $3.289 billion from $3.433 billion last year. Earnings per share declined 4.3 percent to $3.30 from $3.45 a year ago.
Adjusted earnings were $3.43 per share for the period, compared with $3.56 in the same period of fiscal 2025.
Operating income dropped 3 percent year-over-year to $4.98 billion, and adjusted operating income fell 2.3 percent to $5.15 billion.
Adjusted operating margin was 12.3 percent, down from 13.2 percent a year ago.
In the quarter, total operating expenses grew 5.7 percent from the prior year to $8.80 billion.
The company's net sales for the period rose 4.8 percent to $41.765 billion from $39.856 billion last year. Comparable sales for the first quarter increased 0.6 percent, compared to 0.3 percent drop a year ago. Comparable sales in the U.S. increased 0.4 percent.
Foreign exchange rates positively impacted total company comparable sales by approximately 55 basis points.
Customer transactions were 391.1 million, down 0.9 percent from last year.
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