Home Depot Q2 2026 Earnings Analysis

More earnings analysis: https://betafinch.comGroups: RETAIL (https://betafinch.com/groups/RETAIL)──────────**WELCOME TO BETA FINCH: HOME DEPOT Q2 2026**ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown. I'm Alex, joined as always by Jordan, and today we're digging into Home Depot's second quarter fiscal 2026 numbers. Big one — the world's largest home improvement retailer, a lot of moving pieces this quarter.JORDAN: Lots to get into, including some tariff refund math that tripped up a few analysts on the call.ALEX: We'll get there. But first, the standard disclosure: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.JORDAN: Good to have that on record. So, headline numbers — Home Depot posted $47.9 billion in sales, up 5.7% year-over-year. Comp sales up 1.7% overall, 1.3% in the U.S. specifically.ALEX: And adjusted diluted EPS came in at $4.92, versus $4.68 a year ago. That actually beat expectations — management said the quarter exceeded what they'd planned for.JORDAN: Worth noting right up top — before the numbers, CFO Richard McPhail addressed CEO Ted Decker's temporary medical leave of absence. Leadership wished him a quick recovery and said Ann-Marie Campbell and the broader team are steering the ship in the meantime.ALEX: Good context to have. Now let's talk about what actually drove the quarter, because it's a broader story than just "big box retailer sells more stuff." Thirteen of sixteen merchandising departments posted positive comps — storage, electrical, hardware, power tools, plumbing, paint, flooring, you name it.JORDAN: And it wasn't just seasonal stuff either. Merchandising EVP Billy Bastek made a point of saying only 3 of their top 20 performing categories were seasonal — the "middle of the store," as he called it, core home improvement categories, is where the real strength showed up.ALEX: Portable power was a standout — Q2 was literally a record-setting quarter for portable power tools. And Pro customers outperformed DIY again, continuing a trend we've heard from Home Depot for a while now.JORDAN: The Pro story is interesting because it's not just one thing — it's an ecosystem play. QuoteCenter, the SRS acquisition, GMS, purchase cards — they're stitching all of this together so a Pro can basically source everything through the Home Depot family instead of shopping around. Ann-Marie Campbell said 90% of stores closed a sale through SRS's catalog in the last 12 months.ALEX: That's a real flywheel if it keeps compounding. And on the digital side — online comp sales grew 11%, the fifth straight quarter of double-digit growth. They also launched Express Delivery nationwide this month — three-hour delivery on tens of thousands of products, with most actually arriving in under an hour.JORDAN: That's a meaningful shift. Delivery lead times are down about 45% over the last 18 months. For a company built on people driving to an orange box store, leaning this hard into fast delivery — including big and bulky items and even next-day appliance delivery in some markets — signals they're taking the fight to online-only competitors pretty seriously.ALEX: Now, let's talk about the part of the call that generated the most back-and-forth — gross margin and tariffs.JORDAN: Right, so this is the one investors were parsing closely. Home Depot received $730 million in IEEPA tariff refunds this quarter, and $685 million of that flowed through and reduced cost of goods sold. That gave gross margin a roughly 145 basis point boost.ALEX: But — and this is the nuance — that benefit was largely offset by rising costs elsewhere. About 60 basis points of pressure from fuel, energy, and other input costs, plus another 60 basis points from a mix shift tied to the GMS acquisition. Net-net, grossThis episode includes AI-generated content.