Home Depot Q1 profit falls as cost growth outpaces revenue

US home improvement retailer The Home Depot posted first-quarter fiscal 2026 net sales of $41.76bn, a 4.8% year-on-year (YoY) increase, though rising costs weighed on profitability across the period.

For the quarter ended 3 May 2026, net earnings declined 4.2% to $3.28bn.

The decline reflected cost of sales growing at 6% - outpacing revenue growth – to reach $27.98bn, which compressed gross profit to $13.78bn, a rise of just 2.4%.

Operating income dropped 3% to $4.98bn.

Diluted earnings per share came in at $3.30, down 4.3%, while the adjusted figure stood at $3.43 against $3.56 a year earlier.

Comparable sales edged up 0.6% for the quarter, with US comparable sales advancing 0.4%.

Home Depot chair, president and CEO Ted Decker said: “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.

“As always, our associates provided excellent customer service during the quarter, and I would like to thank them for their continued hard work and dedication to serving our customers.”

The company left its full-year outlook unchanged, forecasting total sales growth of between 2.5% and 4.5%, comparable sales growth ranging from flat to 2.0%, and around 15 new store openings during the fiscal year.

Both diluted and adjusted diluted earnings per share are projected to grow at a rate of flat to 4.0%, from base figures of $14.23 and $14.69, respectively, in fiscal 2025.

Last month, Home Depot completed the acquisition of SIMPL Automation, a Massachusetts-based business specialising in automation and technology systems.

The company said SIMPL applies engineering and AI technologies to help distribution sites run "faster and more efficiently", as the retailer looks to step up automation across its supply chain.

"Home Depot Q1 profit falls as cost growth outpaces revenue" was originally created and published by Retail Insight Network, a GlobalData owned brand.

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