The Home Depot, Inc. (HD Quick QuoteHD - Free Report) used its first-quarter fiscal 2026 earnings call to deliver a restrained message. Management said demand stayed consistent with fiscal 2025 patterns, even as housing affordability pressure and consumer uncertainty continued to weigh on larger discretionary projects.

That left the company focused less on a rebound story and more on execution. Executives emphasized Pro share gains, better digital engagement and a stable full-year outlook as the main reasons they remain on plan.

HD Holds to Its Fiscal 2026 Plan

Chairman, president and CEO Ted Decker said first-quarter results came in line with expectations. He described the business as steady, not accelerating, and said the underlying demand environment looked relatively similar to what the company saw throughout fiscal 2025.

That set up the call’s central point. Home Depot reaffirmed fiscal 2026 guidance for total sales growth of about 2.5% to 4.5% and comparable-sales growth ranging from flat to 2.0%.

Chief financial officer Richard McPhail reinforced that stance in Q&A. He said the external backdrop has become more volatile, but management still feels well-positioned to execute through the rest of the year.

Home Depot Sees Pro as a Key Growth Lever

Decker again made the Pro customer a centerpiece of the story. He said Pro posted positive comparable performance and outperformed DIY during the quarter, with the strongest results coming from more complex purchase occasions.

That matters because the company is trying to win more share from larger residential Pros, including remodelers and small builders. Management tied that progress to investments in field sales, delivery capabilities and trade credit.

Executive vice president of Pro, Michael Rowe, said managed accounts and digital demand from larger Pros continued to grow faster than the broader Pro business. He said the company is gaining traction with higher-value customers that need more complex order management and fulfillment support.

HD Builds Out Its Distribution Platform

Decker also used the call to highlight the company’s broader distribution strategy. He said the recent Mingledorff’s acquisition gives Home Depot a stronger foothold in HVAC distribution and expands its reach into a roughly $100 billion addressable market.

He framed that move as part of a larger enterprise built around SRS, GMS and Construction Resources. Together, those businesses broaden the company’s product reach and deepen its service model for specialized trade customers.

When a Morgan Stanley analyst asked how management defines success in wholesale distribution, Decker said each platform must perform well independently while also creating cross-selling opportunities across the enterprise. He added that the company is targeting roughly $400 million in cross-sell run rate this year.

Home Depot Reworks Stores and Fulfillment

Senior executive vice president Ann-Marie Campbell said Home Depot has shifted more store tasking to its merchandising execution team so orange-apron associates can spend more time serving customers. The company has already made that transition in more than 1,000 stores.

Campbell said the change is improving productivity on the tasking side while also lifting engagement and repeat-shopping indicators. She presented the effort as a direct investment in the company’s core store experience.

The company is also refining its fulfillment model. Campbell said Home Depot has begun routing orders to the optimal store based on distance, inventory availability and delivery speed, helping reduce cancellations and improve customer satisfaction.

HD Balances Sales Growth With Margin Pressure

The quarter itself offered enough support for that narrative without changing it. Revenues rose 4.8% year over year to $41.77 billion, ahead of the Zacks Consensus Estimate of $41.49 billion and producing a 0.67% surprise.

Adjusted earnings per share were $3.43, up against a Zacks Consensus Estimate of $3.40 and yielding a 0.88% surprise. On a reported basis, earnings per share declined from $3.45 a year earlier to $3.30.

The Home Depot, Inc. Price, Consensus and EPS Surprise

The Home Depot, Inc. price-consensus-eps-surprise-chart | The Home Depot, Inc. Quote

McPhail said gross margin fell about 75 basis points to 33.0%, largely because of mix changes tied to the GMS acquisition. Operating margin declined to 11.9%, while adjusted operating margin came in at 12.3% after excluding acquired intangible amortization.

HD Says Weather Drove the Quarter’s Swings

Analyst questions centered on the shape of demand, the impact of weather and whether a tougher macro backdrop should lead to lower expectations. Management did not change its tone under that scrutiny.

A JPMorgan analyst pressed on spring selling patterns and storm-related effects. Merchandising chief Billy Bastek said February and March were solid, late April weakened as weather comparisons turned less favorable, and early May returned to the same level of customer engagement seen earlier in the quarter.

Decker added that the company is not counting on a broad recovery in housing activity to drive better results later in the year. He said the expected lift in the second half is tied to a return to more normal storm activity, while larger discretionary projects remain pressured by uncertainty and high mortgage rates.

Home Depot Stays Committed to Its Priorities

The tone exiting the call was steady and disciplined. Decker said management still views the current environment as a cycle rather than a reason to rethink how capital and resources are being allocated.

That view was backed by continued investment in stores, fulfillment and the Pro ecosystem. Home Depot spent about $845 million on capital expenditures in the quarter and paid about $2.3 billion in dividends while keeping its broader operating strategy unchanged.

Zacks Signals on HD

HD carries a Zacks Rank #3 (Hold), with a Value Score of D, Growth Score of B, Momentum Score of C and VGM Score of C. Under the Zacks framework, a Rank #3 can still be held, though the stronger near-term profiles are usually found among Zacks Rank #1 or #2 stocks paired with A or B Style Scores. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The current score mix points to better growth characteristics than value or momentum. The Zacks Rank can also change after earnings as estimate revisions move through the system in the days and weeks following the report.