Home Depot Says Consumers Are Still Spending – Just Not On Major Renovations

• Home Depot reported better-than-expected Q1, with comparable sales in the U.S. returning to growth.
• It highlighted steady demand for smaller home improvement projects, which helped offset weakness in larger renovation projects.
• Home Depot's CEO said the underlying demand for the business was relatively similar to 2025, despite greater consumer uncertainty and housing affordability pressures.

Shares of Home Depot Inc (HD) rose about 1% in premarket trading on Tuesday after the company reported first-quarter earnings that narrowly beat Wall Street expectations, driven by stable demand. The retailer also reaffirmed its 2026 guidance despite ongoing pressures on housing affordability and consumer uncertainty.

Home Depot’s Comparable Sales Returns To Growth 

The company reported first-quarter (Q1) revenue of $41.8 billion, slightly surpassing analysts’ expectations of $41.5 billion, while adjusted net earnings of $3.43 per share beat Wall Street expectations of $3.41 per share, according to Koyfin data. Comparable sales for Q1 increased 0.6%, and comparable sales in the U.S. grew 0.4%.

"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," said Ted Decker, Chair, President and Chief Executive Officer at Home Depot.

Bright Spots: Outdoor And Paint Categories 

In a recent interview with the Wall Street Journal, Home Depot's Chief Financial Officer, Richard McPhail, said homeowners are continuing to hold back on large home-improvement projects due to economic uncertainty.

He also added that, as seen in strong sales in outdoor categories and paint, homeowners have continued to show interest in improving their homes, but hesitancy to undertake larger projects has led to weakness in lumber, flooring, lighting, and millwork. He further noted that, overall, the company has seen demand levels consistent with those in 2025.

HD Reaffirms 2026 Guidance

For 2026, Home Depot reaffirmed its outlook, expecting total sales growth of about 2.5% to 4.5% and comparable sales growth of flat to 2.0%.

The company also anticipates adjusted diluted earnings per share to increase by about flat to 4.0% from $14.69 in fiscal 2025. In terms of capital expenditures, the company notes that it would be about  2.5% of total sales in 2026.

What Does Retail Think Of HD?

On Stocktwits, retail sentiment surrounding the stock has remained ‘extremely bullish’ while message volumes also remained in the ‘extremely high’ zone in the past 24 hours.

One user on Stocktwits said he liked Home Depot’s first-quarter performance.

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