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Is HD Stock Worth Buying as Pro Growth Battles Housing Headwinds?
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Key Takeaways
Home Depot's sales rose 5.7% in Q2, while comparable sales increased 1.7% and adjusted EPS gained 5.1%.
Pro demand outpaced DIY, while big-ticket transactions above $1,000 increased 2.4% in the second quarter.
Home Depot's online sales rose 11%, but comparable customer transactions declined 1% in the second quarter.
The Home Depot, Inc. (HD - Free Report) is showing better operating momentum even as the housing backdrop remains difficult. Fiscal second-quarter 2026 sales rose 5.7% year over year to $47.86 billion, while comparable sales increased 1.7%. Adjusted earnings advanced 5.1% to $4.92 per share.
The tension is clear. Pro demand and digital engagement are improving, but customers remain cautious on larger discretionary projects as affordability and low housing turnover constrain renovation activity.
Pro Investments Keep Growth Moving
Home Depot’s Pro business posted positive comparable sales in the second quarter and outperformed DIY, with gains across all Pro cohorts. Pro-heavy categories such as decking, dimensional lumber, pipe and fittings, fasteners, hand tools and concrete also grew. Big-ticket transactions above $1,000 increased 2.4%, improving from 0.8% growth in the first quarter.
SRS is broadening that opportunity. It posted positive comparable sales across all verticals and management expects mid-single-digit organic sales growth for fiscal 2026. The Mingledorff’s acquisition added HVAC as a fifth SRS operating line, while integration with GMS expands the product catalog available to larger professional customers. Over the 12 months through the second quarter, 90% of Home Depot stores closed at least one SRS sale through QuoteCenter.
Digital execution is adding another layer. Online sales increased 11% year over year, marking a fifth straight quarter of double-digit growth. More than 65% of stocked parcel deliveries now arrive the same day or next day, while about 55% of stocked big-and-bulky deliveries arrive within two days.
The Home Depot, Inc. Price, Consensus and EPS Surprise
Traffic remains a weak point. Comparable customer transactions declined 1% in the second quarter, while comparable average ticket increased 2.8%. That mix shows sales growth is still relying more on spending per visit than on more customer trips.
Larger discretionary projects also remain constrained. Management cited housing affordability and historically low turnover as ongoing drags, with customers favoring smaller repair and maintenance work. Home Depot reaffirmed fiscal 2026 comparable-sales guidance of flat to 2% growth and total sales growth of 2.5-4.5%.
Margins offer limited cushion. Adjusted operating margin slipped 10 basis points in the quarter, and fiscal 2026 guidance calls for an adjusted operating margin of 12.8-13%. The company expects tariff refunds received in the second quarter to be offset by higher fuel, energy and other product input costs over the year.
Peers Face the Same Split Demand
Lowe’s Companies, Inc. (LOW - Free Report) is seeing a similar divide. Its second-quarter 2026 comparable sales increased 0.2%, supported by Pro, home services and online growth, while the company cited persistent pressure on discretionary DIY spending.
Builders FirstSource, Inc. (BLDR - Free Report) , which is more directly tied to professional construction activity, reported an 8.8% second-quarter sales decline as a lower housing-starts environment weighed on demand. That contrast underscores why Home Depot’s Pro share gains matter, but also why the broader housing cycle remains a meaningful constraint.
What the Zacks Signals Say About HD
HD currently carries a Zacks Rank #3 (Hold). The stock also has a VGM Score of B, Growth Score of B, Momentum Score of A and Value Score of C. The stronger Growth and Momentum readings indicate favorable characteristics in those styles, while the Value Score is more middle-of-the-pack.
The Rank is the more important near-term signal. HD trades at 18.9X forward 12-month earnings, above the Zacks sub-industry’s 17.5X but below the S&P 500’s 19.8X. A Zacks Rank #3 supports a measured stance rather than a clear fresh-buy signal. Home Depot’s Pro ecosystem, SRS expansion and digital gains provide identifiable growth drivers, but soft traffic, muted big-ticket demand and limited margin expansion leave the near-term investment case balanced.
View the Zacks #1 Rank List
Image: Bigstock
Is HD Stock Worth Buying as Pro Growth Battles Housing Headwinds?
Key Takeaways
The Home Depot, Inc. (HD - Free Report) is showing better operating momentum even as the housing backdrop remains difficult. Fiscal second-quarter 2026 sales rose 5.7% year over year to $47.86 billion, while comparable sales increased 1.7%. Adjusted earnings advanced 5.1% to $4.92 per share.
The tension is clear. Pro demand and digital engagement are improving, but customers remain cautious on larger discretionary projects as affordability and low housing turnover constrain renovation activity.
Pro Investments Keep Growth Moving
Home Depot’s Pro business posted positive comparable sales in the second quarter and outperformed DIY, with gains across all Pro cohorts. Pro-heavy categories such as decking, dimensional lumber, pipe and fittings, fasteners, hand tools and concrete also grew. Big-ticket transactions above $1,000 increased 2.4%, improving from 0.8% growth in the first quarter.
SRS is broadening that opportunity. It posted positive comparable sales across all verticals and management expects mid-single-digit organic sales growth for fiscal 2026. The Mingledorff’s acquisition added HVAC as a fifth SRS operating line, while integration with GMS expands the product catalog available to larger professional customers. Over the 12 months through the second quarter, 90% of Home Depot stores closed at least one SRS sale through QuoteCenter.
Digital execution is adding another layer. Online sales increased 11% year over year, marking a fifth straight quarter of double-digit growth. More than 65% of stocked parcel deliveries now arrive the same day or next day, while about 55% of stocked big-and-bulky deliveries arrive within two days.
The Home Depot, Inc. Price, Consensus and EPS Surprise
The Home Depot, Inc. price-consensus-eps-surprise-chart | The Home Depot, Inc. Quote
Housing Headwinds Still Cap Big Projects
Traffic remains a weak point. Comparable customer transactions declined 1% in the second quarter, while comparable average ticket increased 2.8%. That mix shows sales growth is still relying more on spending per visit than on more customer trips.
Larger discretionary projects also remain constrained. Management cited housing affordability and historically low turnover as ongoing drags, with customers favoring smaller repair and maintenance work. Home Depot reaffirmed fiscal 2026 comparable-sales guidance of flat to 2% growth and total sales growth of 2.5-4.5%.
Margins offer limited cushion. Adjusted operating margin slipped 10 basis points in the quarter, and fiscal 2026 guidance calls for an adjusted operating margin of 12.8-13%. The company expects tariff refunds received in the second quarter to be offset by higher fuel, energy and other product input costs over the year.
Peers Face the Same Split Demand
Lowe’s Companies, Inc. (LOW - Free Report) is seeing a similar divide. Its second-quarter 2026 comparable sales increased 0.2%, supported by Pro, home services and online growth, while the company cited persistent pressure on discretionary DIY spending.
Builders FirstSource, Inc. (BLDR - Free Report) , which is more directly tied to professional construction activity, reported an 8.8% second-quarter sales decline as a lower housing-starts environment weighed on demand. That contrast underscores why Home Depot’s Pro share gains matter, but also why the broader housing cycle remains a meaningful constraint.
What the Zacks Signals Say About HD
HD currently carries a Zacks Rank #3 (Hold). The stock also has a VGM Score of B, Growth Score of B, Momentum Score of A and Value Score of C. The stronger Growth and Momentum readings indicate favorable characteristics in those styles, while the Value Score is more middle-of-the-pack.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
The Rank is the more important near-term signal. HD trades at 18.9X forward 12-month earnings, above the Zacks sub-industry’s 17.5X but below the S&P 500’s 19.8X. A Zacks Rank #3 supports a measured stance rather than a clear fresh-buy signal. Home Depot’s Pro ecosystem, SRS expansion and digital gains provide identifiable growth drivers, but soft traffic, muted big-ticket demand and limited margin expansion leave the near-term investment case balanced.