Home Depot's Storm-Driven Growth Faces Test in Q2 Earnings

Home Depot is set to report its Q2 2026 earnings on August 18. The stock has been down about 8% over the past year, while the S&P 500 gained double digits. Management has said that any improvement in sales is due to a return to normal storm activity, not a rebound in underlying demand.

The company guided fiscal 2026 comps to flat-to-2% growth, and Q1 landed at positive 0.6%. A Q2 comp near or above the 0.6% pace would be a good sign for the stock's recovery, while a negative comp would revive concerns about demand.

The company also faces pressure on its gross margin, which declined in Q1 due to the GMS acquisition changing the sales mix. CFO Richard McPhail said that pressure would continue in Q2 but improve by the back half of the year.

Home Depot's push to win professional contractors is a key story, with the company expecting $400 million in cross-sell revenue this year and plans to double that next year.