Home Depot CFO: 'No question' consumers feel the effects of high gas prices, affordability pressures

Home Depot (HD) reaffirmed its 2026 outlook as homeowners continued to invest in smaller do-it-yourself projects amid a tough housing market backdrop, concerns about higher gas prices, and economic uncertainty.

“There’s no question that the average consumer is feeling pressure from rising fuel costs,” Home Depot CFO Richard McPhail told Yahoo Finance as gas prices remain above $4.50. “Our customer tends to have higher incomes and higher housing wealth, but they do tell us that they’re feeling the impact of fuel costs.”

McPhail added that small projects like painting continue to be “a real source of strength for us for the past few years.”

However, “categories that are more associated with larger projects, like lumber, building materials, millwork, flooring, and lighting … customers continue to defer those larger projects as a result of the concerns they feel over economic uncertainty and general affordability,” he said.

Home Depot stock fell 2% in early trading on Tuesday, also weighing on shares of rival retailer Lowe’s (LOW), which reports earnings on Wednesday.

In the first quarter, the company posted same-store sales growth of 0.6%, slightly below Wall Street’s outlook of 0.9% growth, according to Bloomberg consensus data. The average ticket size increased 2.2%, while transactions declined by 1.3%.

As mortgage rates remain elevated and Americans have seen real estate values increase, with the average home price hovering around $400,000, they’re taking on smaller DIY projects.

“The customer is absolutely spending on enhancements to their home, it's just coming through in smaller ticket sizes than we might have seen historically,” McPhail said.

Read more: The hidden cost of homeownership: How to budget for maintenance and repairs

First quarter revenue beat expectations, growing roughly 5% year over year to $41.8 billion, higher than the $41.6 billion the team posted this time last year. Adjusted earnings came in at $3.43, topping expectations of $3.41.

Home Depot’s Pro business outperformed its DIY segment. The company has continued to make significant investments in that division following its acquisition of SRS Distribution in 2024 for $18.5 billion.

Earlier this year, Home Depot acquired Mingledorff's, a leading wholesale distributor of heating, ventilation, and air conditioning equipment and parts.

Digital sales also outperformed, up 10% year over year in the quarter, which McPhail attributed to improvements in Home Depot’s online experience. He also noted that artificial intelligence tools are leading to “better product recommendations and product information.”