The Home Depot, Inc. (HD Quick QuoteHD - Free Report) is set to report third-quarter fiscal 2026 results on Nov. 17, before market open. The company is expected to report year-over-year top- and bottom-line growth when it reports fiscal third-quarter results. The Zacks Consensus Estimate for the fiscal third-quarter revenues is pegged at $42.7 billion, indicating growth of 3.3% from the year-ago quarter’s actual.

The Zacks Consensus Estimate for quarterly earnings per share (EPS) of $3.81 indicates growth of 3.5% from the year-ago period’s reported figure. The consensus estimate for EPS has moved up by a penny in the past seven days.

The Atlanta, GA-based leading home improvement retailer delivered a trailing four-quarter average earnings surprise of 2.9%. In the last reported quarter, the company delivered an earnings surprise of 4.5%.

HD’s Q2 Earnings Whispers

Our proven model conclusively predicts an earnings beat for Home Depot this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Home Depot has an Earnings ESP of +1.10% and a Zacks Rank #3 at present.

Trends to Monitor Before HD’s Q3 Earnings

Home Depot’s fiscal third-quarter results are expected to reflect encouraging business momentum, supported by resilient demand for smaller home improvement projects, strengthening Pro sales and continued digital expansion. However, housing market uncertainty, subdued demand for large discretionary projects and rising operating costs remain key factors to watch.

Home Depot continues to invest in an integrated retail model, digital investments, product innovations and Pro-focused initiatives. Seamless connectivity across its stores, online platforms and supply chain is enhancing customer experience and driving higher engagement.

Home Depot has been benefiting from positive comparable sales growth, with most merchandising departments delivering positive comps. Pro customers have outperformed DIY shoppers, reflecting healthy demand across building materials, tools and repair-related categories. The Pro segment growth continues to be supported by targeted investments and expanding ecosystem capabilities. SRS remains a key Pro lever, with the Mingledorff’s deal adding an HVAC vertical and extending cross-sell opportunities. 

On the last reported quarter’s earnings call, management indicated that demand trends at the beginning of the fiscal third quarter remained consistent with the second-quarter levels.

However, underlying demand is constrained by elevated mortgage rates, weak housing turnover and consumer uncertainty, which continue to pressure larger discretionary remodeling projects. At the second-quarter fiscal 2026 earnings call, management said that housing turnover had stayed at historically low levels for four years and there was no sign of an inflection point. Until turnover recovers, demand is likely to remain skewed toward smaller projects, limiting the contribution from higher-value renovations and financed discretionary work.

Margins will be another key focus. Home Depot continues to face limited margin expansion because acquisition mix, operating expenses and higher input costs offset part of the sales growth. On the last reported quarter’s earnings call, management indicated that the timing of tariff refunds created a temporary gross margin benefit in the fiscal second quarter, which is likely to be partially reversed in the third quarter as incremental costs flow through. Management expects fourth-quarter gross margin to remain relatively flat year over year, suggesting continued pressure on profitability despite efforts to manage costs and maintain competitive pricing.

Our model predicts adjusted operating income to increase 3.4% in the fiscal third quarter, with a 10-bps rise in the operating margin to 13.4%.

HD’s Price Performance & Valuation

Home Depot’s shares have gained 2.8% in the past three months compared with the industry’s 4% growth. The stock has outpaced the S&P 500’s decline of 2.8% and the Retail-Wholesale sector’s growth of 1.1% in the same period.

The Home Depot stock has underperformed Lowe’s Companies Inc. (LOW Quick QuoteLOW - Free Report) and Williams-Sonoma Inc. (WSM Quick QuoteWSM - Free Report) , which have risen 4.1% and 3.6%, respectively, in the past three months. Meanwhile, HD has outperformed Floor & Decor Holdings Inc. (FND Quick QuoteFND - Free Report) , which has declined 16.6% in the same period.

At the current price of $348.26, HD trades 12.4% below its 52-week high mark of $397.63, reflecting upside potential.

HD’s 3-Month Stock Performance

Image Source: Zacks Investment Research

Home Depot’s current valuation appears quite pricey. The company trades at a forward 12-month P/E multiple of 22.27X, exceeding the industry average of 20.55X.

Image Source: Zacks Investment Research

Investment Thesis

Home Depot continues to benefit from its leading position in the home improvement industry and disciplined execution of its “One Home Depot” strategy. Investments in digital capabilities, supply-chain efficiency and in-store technology have strengthened customer engagement and operational productivity.

Its interconnected retail model enhances convenience for do-it-yourself customers and professional contractors, while the expanding Pro ecosystem, supported by the SRS Distribution acquisition, reinforces its competitive position in building materials. 

Although softer discretionary spending, subdued home improvement demand and macroeconomic uncertainty may constrain near-term performance, Home Depot’s scale, operational efficiency and strategic investments provide a solid foundation for sustainable growth. The company remains well-positioned to capitalize on improving housing market conditions, recovering renovation activity and rising demand from professional customers over the long term.

Conclusion

Ahead of its third-quarter fiscal 2026 results, Home Depot appears well-positioned for long-term growth, supported by its market leadership, expanding Pro ecosystem and continued investments in digital capabilities and supply-chain efficiency. Strengthening professional customer engagement and strategic acquisitions should reinforce its competitive position and support future growth.

However, near-term challenges remain concerning, including elevated mortgage rates, sluggish housing turnover, subdued demand for discretionary remodeling projects and persistent margin pressures. Moreover, the stock’s premium valuation warrants caution, particularly amid an uncertain demand environment.

While the upcoming results may reflect modest sales and earnings growth, a meaningful recovery in larger renovation projects could take time. Nevertheless, Home Depot’s strong fundamentals and strategic initiatives position it favorably to capitalize on a broader housing market recovery.