Home Depot Q1 earnings down, comps up

What happened: Home Depot reported Q1 earnings on May 23, with net earnings down 4.6% YoY to $3.83 billion, impacted by higher expenses. However, net sales and comparable sales grew 4.8% and 5.2% respectively, surpassing analyst estimates. The company maintained its fiscal 2026 outlook. Despite the mixed results, Home Depot shares rose 0.7% in pre-market trading.

Market impact: The home improvement sector saw a modest reaction, with Home Depot's stock reaching a two-year low, pushing its dividend yield above 3%. This attracted bullish investors seeking high-yielding dividend stocks. The company's expansion into the professional market through acquisitions like SRS and GMS also drew attention.

What to watch next: Home Depot's Q2 earnings, scheduled for August 15, will provide further insight into its earnings trajectory. Additionally, investors should monitor the company's progress in the professional market and any updates on its fiscal 2026 outlook.