Home Depot Beats Q2 Estimates on Strong Repair Demand

Home Depot's second-quarter results exceeded expectations as repair and maintenance projects remained strong despite high mortgage rates and elevated home prices. The Atlanta-based retailer reported sales of $47.86 billion for the quarter, up 5.7% from a year ago and ahead of analysts' projections.

Adjusted earnings per share climbed to $4.92 from $4.68 in the prior year period, beating the consensus estimate of $4.73. Comparable sales rose 1.7%, with U.S. comparable sales increasing 1.3%.

Homeowners are continuing to spend on smaller maintenance jobs like paint, lawn care, and plumbing, while large-scale renovations remain subdued due to high mortgage rates. The company's professional contractor business outperformed the DIY segment, with SRS Distribution posting positive comparable sales across all verticals.

The tariff refund of $730 million provided a 145-basis-point lift to gross margin, which landed at 33.7%. However, cost pressures are expected to offset this benefit over the course of the fiscal year. The company reaffirmed its full-year guidance, calling for comparable sales growth between flat and 2%.