The Home Depot Inc

UBS has identified the leading U.S. hardlines retail stocks as the industry confronts the emergence of AI-powered shopping agents, which the firm calls one of the most consequential developments in retail since the rise of e-commerce. The analysis examines how retailers with scale, fulfillment capabilities, and genuine differentiation may navigate the shift as AI agents increasingly intermediate commerce between consumers and merchants. UBS says the most immediate downside risk to revenue remains low, but the larger risk may emerge in profit pools rather than top-line sales, particularly as AI agents potentially bypass sponsored search results and retail media advertisements. The six names on the list are Walmart, Target, Costco, Home Depot, Lowe's, and Kroger. Walmart is cited for a balanced strategy that embraces partnerships with external AI platforms while investing in its own capabilities, with the challenge centering on protecting high-margin advertising businesses and ecosystem economics rather than preserving sales growth. Costco benefits from scale, pricing power, and a differentiated membership model, while Home Depot and Lowe's retain defensive advantages through installation services, technical expertise, and project guidance, and Kroger operates in grocery, where repetitive shopping is conducive to automation but fresh food selection and immediate consumption needs continue to anchor consumers in physical stores.

Home Depot is leaning harder on professional customers as housing affordability and low turnover continue to suppress larger remodeling projects, with second-quarter fiscal 2026 results showing meaningful support from SRS, specialty distribution and cross-selling. The Pro business posted positive comparable sales in the second quarter and outperformed DIY, with gains across all Pro cohorts, while big-ticket transactions above $1,000 increased 2.4% year over year, improving from 0.8% growth in the first quarter. SRS posted comparable sales above the company average and positive comps across all verticals, and management expects mid-single-digit organic sales growth in fiscal 2026; the Mingledorff's acquisition added HVAC as a fifth SRS operating line, and the GMS platform broadened the product catalog available to professional customers. Over the 12 months through the second quarter, 90% of stores closed at least one SRS sale through QuoteCenter, and Home Depot plans to add 40-50 SRS branches in fiscal 2026 alongside about 15 new retail stores, while online sales rose 11% in the second quarter, a fifth consecutive quarter of double-digit growth. Housing remains the central constraint: comparable customer transactions declined 1% year over year in the second quarter while comparable average ticket increased 2.8%, and management said housing turnover has remained at historically low levels for four years with no sign of an inflection point. Home Depot still delivered 5.7% sales growth and a 1.7% comparable-sales increase in the second quarter, then reaffirmed fiscal 2026 guidance for total sales growth of 2.5-4.5% and comparable sales ranging from flat to 2%.

DoorDash, Instacart and Uber Eats have grown from restaurant-focused apps into the fulfillment backbone for thousands of U.S. retailers, turning stores themselves into same-day shipping warehouses rather than building new distribution centers as Amazon did. DoorDash, which launched grocery and convenience in mid-2020 and added home improvement in 2024, now serves 44 of the top 100 U.S. retailers, while Instacart connects more than 2,200 retail banners representing almost 100,000 stores, a network reaching more than 98% of North American households. Uber recast grocery, alcohol, convenience and general merchandise as a single Grocery & Retail business, adding Home Depot for contractors and bringing almost 9,000 Dollar Tree stores onboard in an August 2025 partnership. The shift became durable in 2024, when DoorDash posted its first annual profit under generally accepted accounting principles, $123 million on $10.7 billion in revenue, and Instacart cleared $457 million in net income. Now the platforms are extracting more from the retailers that depend on them: DoorDash charges restaurants commissions of up to 30% of each order's subtotal on its Premier plan, and Uber Eats' blended cost commonly runs 25% to 35%, according to an analysis by direct-ordering vendor Zay-OS. A joint investigation by the Groundwork Collaborative, Consumer Reports and More Perfect Union found Instacart used pricing software called Eversight to run hidden randomized experiments that could add as much as 23% to the cost of an identical item ordered from the same store at the same moment, a practice Instacart said in a July 2026 post that a few retail partners had wound down. Meanwhile, New York City's Department of Consumer and Worker Protection set a delivery-worker minimum of $22.13 for the first pay period starting on or after April 1, 2026, after a 3.2% inflation adjustment, and plans to cover all delivery apps in early 2027.

Home Depot executives said the retailer's second-quarter performance exceeded its original forecast, supported by broad-based strength in core home-improvement categories, delivery investments and continued gains with professional customers despite pressure on consumer sentiment. Executive vice president and chief financial officer Richard McPhail and executive vice president of merchandising Billy Bastek discussed demand trends, pricing, professional-customer initiatives, artificial-intelligence investments and capital allocation during a fireside chat. Bastek said 13 of the company's 16 merchandising categories posted positive comparable sales in the second quarter, with strength extending across core categories including plumbing, electrical, hardware and tools rather than being concentrated in seasonal products. Home Depot has posted eight consecutive quarters of positive comparable sales with professional customers, and McPhail outlined a strategy to expand share of the estimated $700 billion professional market within a $1.2 trillion total addressable market, with the company expecting $400 million in cross-selling during 2026, primarily through joint sales efforts targeting home builders and large remodelers. On delivery, Bastek said 65% of parcel shipments arrive the same or next day and 55% of big-and-bulky products arrive within two days, while McPhail said Home Depot has committed to several billion dollars of productivity improvements in its expense base over the next few years and expects to return to a debt-to-EBITDA ratio of approximately 2 times by the middle of fiscal 2027, resuming share repurchases by the end of the second quarter of 2027.

Home Depot reported that its second-quarter fiscal 2026 gross margin rose about 25 basis points to 33.7%, helped by $730 million of IEEPA tariff refunds, of which $685 million reduced cost of goods sold and provided roughly 145 basis points of gross-margin benefit. That benefit offset about 60 basis points of higher costs tied to fuel, energy and other product inputs, though management expects those rising costs to fully offset the tariff-refund benefit over the full year and is also facing incremental tariff pressures not contemplated in its original 2026 plan. Home Depot expects a fiscal 2026 gross margin of 33.1% and a fourth-quarter gross margin roughly flat year over year. Among peers, Lowe's second-quarter fiscal 2026 gross margin fell 80 basis points as a roughly 30-basis-point tariff refund benefit was largely offset by elevated fuel and transportation costs, while Floor & Decor's adjusted gross margin slipped 20 basis points to 43.7% and the company guided to 43.6-43.8% for the year. Home Depot shares have lost 26.3% over the past year versus a 32% decline for the industry, and the stock trades at a forward price-to-earnings ratio of 19.87X against an industry average of 17.96X.

Home Depot is expanding its Food Operations program, bringing local and regional food vendors and food trucks to its stores nationwide. The initiative offers breakfast, lunch, and dinner outside Home Depot locations, a strategy the company says is designed to provide convenient food options while strengthening connections between its stores and their local communities. Vice President of Merch Services Richard Goodrich said the mission is to provide local food options that enhance the shopping experience. Unlike Costco's standardized food court with a national menu, Home Depot is bringing local food trucks and vendors to individual stores. The timing follows Home Depot's reported $47.9 billion in second-quarter fiscal 2026 sales, up 5.7% from a year earlier, with comparable sales up 1.7% and U.S. comparable sales up 1.3%, though executives noted larger discretionary projects remain under pressure amid historically low housing turnover and higher mortgage rates. The company received $730 million in tariff refunds during the quarter, with $685 million reducing the cost of goods sold, but said those benefits would be offset by incremental cost pressures during the year.

Walmart and Home Depot are both receiving significant tariff refunds but are handling them differently, as reported by CNBC. Walmart CFO John David Rainey said the company is eligible for roughly $2.9 billion in refunds, with just under $100 million still outstanding, and that the boost contributed to a 1.6% increase in Walmart U.S. gross profit. Rainey said Walmart plans to use the funds to lower prices for consumers, with the impact expected in the current fiscal third quarter. Home Depot received $730 million in tariff refunds during its fiscal second quarter, using about $685 million to reduce cost of goods sold, which lifted gross margin by 0.3 percentage points; CFO Richard McPhail called that "the vast majority" of what the company expected. In contrast, Lowe's CEO Marvin Ellison said the company will not use its refund to cut prices, instead aiming to "deliver strong profitability for our shareholders."

The Home Depot reported fiscal second-quarter net sales up 5.7% to $47.86 billion, its best comparable sales growth since 2022, while confirming CEO Ted Decker is on temporary medical leave. Adjusted profit of $4.92 a share beat the $4.73 analysts expected, and comparable sales rose 1.7%, beating the 0.9% guess. The company received $730 million in tariff refunds, used mostly to lower cost of goods sold, and expanded its Express Delivery service nationwide. It kept its full-year sales growth forecast of 2.5% to 4.5% despite the leadership gap. CFO Richard McPhail noted that the mix of factors unlocking bigger renovation projects hasn't yet materialized, and home turnover remains at a multi-year low, so the sales gain relies on smaller projects. Decker's leave adds uncertainty at the $337 billion company with 470,000 workers and over 2,300 stores, as his duties are split between two leaders.

Home Depot has rolled out its Magic Apron AI shopping assistant across all U.S. stores, offering real-time project guidance, product location, and expert advice through the app and in-store QR codes. The tool supports multiple languages and image recognition to help match projects with materials and tools. Magic Apron is now live in more than 2,000 U.S. stores and handles millions of questions monthly. The nationwide deployment marks a wider use of artificial intelligence in physical home improvement retail. Home Depot, with a market cap of about $337.1 billion, sees this as a key driver for operational efficiency and customer loyalty.

Four major retailers reported Wednesday morning, all beating expectations and raising guidance, but a significant portion of those profits came from a Supreme Court decision rather than stronger consumer spending. The court struck down IEEPA tariffs on February 20th, triggering roughly $166 billion in collections from some 330,000 importers, with about $100 billion refunded as of July 31st. Walmart disclosed the largest refund, while Lowe's received $80 million, about one-ninth of Home Depot's amount. Abercrombie & Fitch reported record second-quarter net sales of $1.27 billion, up 5%, and earnings of $4.17 per diluted share, but the IEEPA refund contributed $1.75 per share, making underlying EPS about $2.42. Williams-Sonoma stood out with comparable brand revenue up 6.2%, accelerating from 4.8% last quarter, and raised its full-year outlook. Kohl's beat with EPS of $1.28 against roughly $0.55 expected, and Bath & Body Works beat despite a 2.3% sales decline. The macro data shows consumers feel better about today but worse about tomorrow, with core PCE rising 0.2% month over month. Investors should normalize for tariff refunds, watch how retailers deploy the windfall, and focus on companies that didn't need the help, like Williams-Sonoma and Sam's Club.

Major US retailers are disclosing how they plan to use billions of dollars in tariff refunds from the federal government. Walmart received approximately $2.9 billion and will lower prices in grocery and general merchandise, while Target got $994 million and used it to boost margins, contributing $1.65 to its $4.11 earnings per share. Amazon received about $600 million and will proactively refund some customers where it can trace passed-on import charges, using the rest to cut prices. Home Depot received $730 million and used $685 million to reduce cost of goods sold, while Lowe's has received $80 million and is still weighing options. The refunds follow the Supreme Court's February ruling striking down tariffs under the 1977 International Emergency Economic Powers Act, with more than $100 billion returned to businesses as of late July.

Corporate earnings this week featured a high-stakes lineup of reports from 12 notable companies across the consumer discretionary, consumer staples, information technology, industrials, and financials sectors. All 12 reporting companies beat consensus earnings estimates, with 11 delivering year-over-year profit expansion. Revenue performance remained strong, as 11 companies topped Wall Street expectations and all 12 achieved year-over-year top-line growth, leaving one firm missing consensus estimates. Among the highlights, Home Depot posted revenue of $47.9 billion and adjusted EPS of $4.92, Lowe's beat on EPS but trimmed its full-year revenue outlook to about $92.0 billion, Walmart shares dropped 9.15% after soft guidance, Target raised its full-year adjusted EPS estimate to $9.90 to $10.90, Analog Devices issued upbeat fiscal Q4 guidance, and TJX raised its full-year EPS guidance to $5.31 to $5.36.

The Home Depot announced that its board of directors declared a quarterly cash dividend of $2.33 per share. The dividend is payable on September 17, 2026, to shareholders of record at the close of business on September 3, 2026. This marks the 158th consecutive quarter the company has paid a cash dividend.

Home Depot announced the nationwide rollout of express delivery, using its more than 2,300 stores as local fulfillment centers for both professional contractors and do-it-yourself customers. The home improvement retailer said nearly every item in its stores is available for delivery in three hours or less for a small flat fee, with no subscription or membership required, and it expects to add even faster delivery speeds in the months ahead. Executive vice president Jordan Broggi said the majority of those deliveries are actually happening in less than one hour. The move is part of a broader retail trend toward in-store fulfillment, which diminishes demand for network carriers like FedEx and UPS. Home Depot also reported second-quarter net income of $4.8 billion, up from $4.6 billion a year earlier, with revenue up 5.7% to $47.9 billion.

Home Depot used its second-quarter fiscal 2026 earnings call to emphasize stronger Pro engagement and faster digital fulfillment while acknowledging continued pressure on larger discretionary home improvement projects. The company reported adjusted earnings of $4.92 per share, beating the Zacks Consensus Estimate of $4.71, and sales of $47.86 billion, topping the $47.23 billion estimate. Management kept its full-year outlook unchanged, reaffirming comparable sales growth of flat to 2% and total sales growth of approximately 2.5% to 4.5%. The company also discussed a $730 million IEEPA tariff refund, with $685 million reducing cost of goods sold and $45 million remaining in inventory, representing about 145 basis points of gross-margin benefit. CFO Richard McPhail said rising fuel, energy and product input costs are expected to fully offset the refunds over the year, with fiscal fourth-quarter gross margin expected to be roughly flat year over year.

Home Depot delivered a strong second quarter, beating expectations with $47.9 billion in revenue, a 5.7% year-over-year increase, and adjusted earnings per share of $4.92. Comparable sales rose 1.7%, and CFO Richard McPhail said results exceeded expectations while reaffirming the full-year outlook. The company also raised its quarterly dividend to $2.33 per share, marking its 156th consecutive cash dividend. The Pro business, anchored by SRS Distribution, is expected to generate $400 million in cross-sell this year, and online comparable sales grew 11% for the fifth straight quarter. 24/7 Wall St. maintains a buy rating with a $386.28 price target, implying 14.46% upside from the August 18 close of $337.49.

Home Depot, the major American home improvement retailer, reported on the 18th that its second quarter results for May through July beat market expectations on both revenue and profit. Revenue rose 5.7 percent from a year earlier to 47.86 billion dollars, exceeding the market forecast of 47.27 billion dollars compiled by LSEG, and adjusted earnings per share came to 4.92 dollars, above the market estimate of 4.73 dollars. Although demand for large-scale renovations remained weak because mortgage rates stayed high, steady demand for smaller repairs and maintenance such as painting and yard care supported performance. Comparable sales in the United States rose 1.3 percent, and overall comparable sales increased 1.7 percent, the strongest growth since the third quarter of 2022. Executive Vice President of Merchandising Billy Bastek said tariff refunds under the International Emergency Economic Powers Act totaled 730 million dollars in the second quarter, reducing cost of sales by 685 million dollars. The company left its full-year revenue and profit outlook unchanged, assuming that the tariff refunds can offset the impact of higher-than-expected cost increases such as fuel expenses.

Home Depot shares advanced about 0.7% to $340.26 Tuesday morning after the world's largest home-improvement retailer reported stronger-than-expected second-quarter results. Revenue climbed 5.7% year over year to $47.9 billion, while adjusted earnings increased 5.1% to $4.92 per share. Comparable sales returned to growth, rising 1.7% overall and 1.3% in the United States as customers continued spending on smaller home projects. The company generated $4.8 billion in net earnings, up from $4.6 billion a year earlier, but management kept its full-year forecast unchanged, calling for comparable sales growth between flat and 2% and adjusted earnings growth between flat and 4%. The stock's valuation picture still shows some upside potential, with the latest GF Value chart showing shares trading at $340.53 versus a GF Value estimate of $383.15, suggesting the stock is about 11.12% below its intrinsic value estimate.

Pre-market futures are in the red following a somewhat down trading day Monday, with the Dow down 79 points, the S&P 500 down 39, and the Nasdaq down 405 points. The 30-year bond yield reached its highest level in 19 years at 5.32%, while the 10-year yield hit a 19-month high of 4.74%. Brent crude is back above $91 per barrel as Iran tightens ship traffic through the Strait of Hormuz and Yemeni Houthis bomb a Saudi Aramco refinery for the second time in two weeks. Housing starts for July came in below expectations at 1.239 million seasonally adjusted annualized units, the lightest print since May, versus 1.35 million expected and 1.42 million the prior month, with single-family homebuilding down 9.9% month over month and 16% year over year. Building permits rose 5% to 1.443 million units, the strongest read since February, while import prices dropped an unexpected 0.4% and exports fell 1.3%, the lowest monthly read in more than three years. Home Depot beat second-quarter estimates with earnings of $4.92 per share versus $4.71 expected and revenues of $47.86 billion, up 1.88% from estimates, and shares rose 1.5% on the news.

U.S. bond yields climbed to multi-year highs on Tuesday as new economic reports showed a cooling housing market and declining trade activity. The 30-year yield reached 5.32%, its highest in 19 years, while the 10-year yield hit 4.74%, a 19-month high, and the 2-year hovered around 4.20%. Housing starts for July fell to 1.239 million units, below the 1.35 million expected, with single-family starts down 9.9% month over month, while building permits rose 5% to 1.443 million units. Import prices unexpectedly dropped 0.4% in July, and exports fell 1.3%, the lowest monthly read in over three years. Home Depot beat second-quarter earnings estimates with $4.92 per share versus $4.71 expected, and revenue of $47.86 billion, up 1.88% from estimates.

Home Depot and Klarna both released second quarter earnings results on Tuesday, offering mixed signals on the health of the US consumer. Home Depot reported comparable sales up 1.7%, its best performance since late 2022 and above whisper numbers of 1 to 1.3%, though the residential housing market remains moribund. Klarna posted a profit versus an expected loss, with average revenue per active customer up 24%, but it cut its full-year revenue forecast due to exchange issues and noted possible volume moderation in Germany. The company also announced the planned departure of its CFO, a move that surprised some investors, and it is seeking a New York-based replacement rather than one in Stockholm. A New York Times story highlighted that buy now, pay later services are increasingly being marketed for necessities like rent and utility bills, suggesting pressure on lower-end consumers.

Baidu shares fell 7.2% in premarket trading on Tuesday after the Chinese internet company reported second-quarter revenue and adjusted earnings below analysts' estimates. The company reported revenue of RMB31.3B, or $4.62B, down 4% from a year earlier and below the $4.74B consensus estimate, while non-GAAP diluted earnings came in at $1.06 per ADS, missing the $1.46 estimate. Weakness in its online marketing business offset strong growth in AI cloud services. Home Depot shares rose 2.16% after reporting second-quarter revenue of $47.9B, up 5.8% from a year earlier, with comparable sales rising 1.7% versus the 0.9% consensus estimate. Nike shares closed at $39.09 on Monday, their lowest close since 2014, while Alibaba shares rose 2.7% to a two-week high ahead of its June-quarter earnings release.

Home Depot is set to report second-quarter fiscal 2026 results on Aug. 18 before market open, with the Zacks Consensus Estimate pegging revenues at $47.5 billion, up 4.9% year over year, and EPS at $4.71, up 0.6%. The company has an Earnings ESP of +1.35% and a Zacks Rank #3, which the model says conclusively predicts an earnings beat. Key drivers include spring demand, Pro momentum, digital sales growth of more than 10%, and contributions from the GMS acquisition and SRS expansion, while elevated mortgage rates and weak housing turnover remain headwinds. Zacks expects gross margin of 32.8%, down 60 basis points year over year, and adjusted operating income to decline 0.2%. Home Depot shares have gained 14.9% in the past three months, outperforming the industry's 12.2% growth, and trade at a forward P/E of 21.83X versus the industry average of 19.9X.

Home Depot has reshaped its leadership structure by unifying its merchandising, customer experience, and Pro-focused teams to pursue a share of the estimated $1.2 trillion home improvement market. The leadership reshuffle arrives as the share price stands at $333.35, with a 7-day return of 2.66% but a 30-day decline of 5.48%, while the 1-year total shareholder return is down 6.88% and the 5-year total shareholder return is 13.33%. The stock now trades at a single-digit discount to both analyst targets and some fair value estimates, with one widely followed narrative suggesting a fair value of about $370.18, implying the stock is modestly undervalued by roughly 9.9%. The company's targeted acquisitions, including SRS and the pending GMS deal, and expansion of its Pro customer ecosystem are expected to increase market share and organic revenue growth over time, though investors should watch for weaker big-ticket remodel demand and rising capital spending that could pressure margins and free cash flow.

The Home Depot announced an organizational realignment to accelerate innovation and capture more of its $1.2 trillion total addressable market. The company unified its private label merchants into the core merchandising organization under Billy Bastek, executive vice president of merchandising, to speed product innovation. It also combined customer experience, online, financial services, and loyalty teams into a single interconnected retail unit led by Jordan Broggi, executive vice president of interconnected retail, aiming to deliver more personalized offers. To target the roughly $700 billion Pro market, the company evolved its Office of Integration into the Office of Pro Acceleration under Richard McPhail, executive vice president and chief financial officer, to coordinate capabilities across Home Depot Pro, HD Supply, SRS, and Construction Resources. Additionally, store, supply chain, and Pro product technology teams will move under Chief Technology Officer Fran Bell to bring new technology to market faster.