Why Home Depot Anticipates Stronger Comparable Sales in the Latter Half of the Year Compared to the First Half

Home Depot Projects Stronger Comparable Sales in Second Half of Fiscal 2026

Home Depot, Inc. anticipates that its comparable sales growth for fiscal 2026 will be more robust in the latter half of the year compared to the first. The company forecasts that comparable sales will range from flat to a 2% increase for the full fiscal year. This outlook is primarily influenced by the easing of major challenges that negatively impacted results in the second half of fiscal 2025.

During the most recent earnings call, leadership explained that the expected improvement in the second half is largely due to the impact of storm activity on last year’s results. Weather events often cause temporary surges in demand for products like roofing, building supplies, and repair materials. When such storms occur one year but not the next, it can lead to uneven year-over-year comparisons across quarters.

The early quarters of fiscal 2026 are likely to face tougher comparisons because of these weather-driven demand spikes. As the year advances and these periods are left behind, the comparison base becomes easier, which should help drive stronger comparable sales in the latter part of the year.

Despite ongoing challenges such as high mortgage rates and limited housing affordability, underlying demand has stayed relatively steady. By the second half of fiscal 2026, Home Depot expects that its significant investments in professional contractor services will begin to deliver more noticeable benefits. The continued integration and organic expansion of SRS and GMS are also set to support the company’s performance.

These strategic moves, combined with a more favorable comparison base later in the year, reinforce management’s optimism for accelerating comparable sales as fiscal 2026 progresses.

Recent Performance and Market Comparison

Home Depot, competing with Floor & Decor Holdings, Inc. and Lowe's Companies, Inc., has seen its stock rise 6.6% so far this year, slightly trailing the home furnishings retail industry’s 7.3% gain. In comparison, Floor & Decor Holdings shares have increased by 9%, while Lowe’s has grown by 6.9% over the same period.

Image Source: Zacks Investment Research

Valuation and Analyst Estimates

From a valuation perspective, Home Depot is currently trading at a forward price-to-earnings (P/E) ratio of 24.00, which is above the industry average of 22.08. The company’s Value Score is rated C. Compared to its peers, Home Depot trades at a lower forward P/E than Floor & Decor Holdings (30.75), but at a premium to Lowe’s (19.98).

Image Source: Zacks Investment Research

Analyst consensus from Zacks suggests that Home Depot’s sales for the current fiscal year are expected to grow by 4% year over year, with earnings per share projected to rise by 3.3%. Looking ahead to the next fiscal year, estimates point to a 4.4% increase in sales and an 8.5% jump in earnings.

Image Source: Zacks Investment Research

Currently, Home Depot holds a Zacks Rank #3 (Hold).

Special Report: Capitalizing on the Next AI Boom

The upcoming wave of artificial intelligence innovation is expected to generate substantial opportunities for investors, particularly those who act early. This technological shift is projected to add trillions to the global economy and transform many aspects of daily life.

Investors who timed their entry into companies like Nvidia have already seen significant returns.

However, the rapid ascent of the initial group of AI stocks may soon plateau, paving the way for a new set of emerging leaders in the sector.

Zacks’ report, AI Boom 2.0: The Second Wave, highlights four lesser-known companies that could become major players in the next phase of AI growth.

Additional Free Stock Analysis Reports

Zacks Investment Research