Home Depot's fiscal second quarter showed a familiar two-speed pattern: small-project repair work carried the comparable store sales line higher, while the larger Pro contractor customer retrenched. Net sales for the quarter ended early August reached $47.9 billion, up 5.7% year over year. Comparable store sales rose 1.7%. The pattern is consistent with a consumer who is willing to spend on a leaking faucet but is hesitant to book the kitchen remodel. The Pro side, which has been the more durable pillar of the business for years, is showing the strain of a housing market that continues to drag on volume of larger renovation work. Comparable customer transactions fell 1.0%, while comparable average ticket rose 2.8%, meaning the underlying consumer behavior is repair-driven rather than project-driven.
The reading that matters more than the headline comparable number is the underlying source of growth. Roughly $1.4 billion of the quarter's net sales increase came from the GMS acquisition closed in late 2025, plus a smaller contribution from the recent Mingledorff's deal. Strip those out and the organic comparable growth on the legacy retail footprint was modest. Earnings per share of $4.79 grew 4.6% year over year, helped by a one-time tailwind from refunds of tariffs paid under the now-invalidated International Emergency Economic Powers Act regime. That tailwind is non-recurring, while the underlying operating story is one of margin pressure offset by an active deleveraging program and disciplined capital returns.
The stock trades near $320, with a market capitalization in the neighborhood of $319 billion. The fifty-two-week range between $289 and $427 is wide enough that the current price tells the reader the housing-cycle bear case has already been discounted by the equity. The forward earnings multiple sits near twenty-times consensus, a discount to the peaks of the past few years that reflects skepticism about the housing cycle and the pace of Pro recovery. The forward variable that decides whether that discount closes is whether comparable store sales accelerate back toward mid-single-digits or settle into a low-single-digit drift. A continued pause on share repurchases through fiscal 2026 removes a structural support for earnings per share, which makes the comparable-sales trajectory the dominant lever for the multiple. Investors who anchor on the headline rate alone miss that the underlying mix is getting softer at the same time the headline reads acceptable.