Home Depot vs. Lowe's Q2 Earnings: What HD and LOW Say About the U.S. Consumer

Home Depot delivered better-than-expected Q2 results and maintained its fiscal 2026 outlook. Lowe’s also remained profitable and generated growth in several strategic areas, but persistent weakness among do-it-yourself (DIY) customers prompted the company to lower its full-year expectations.

Home Depot Posts Solid Q2 Results and Reaffirms Guidance

Home Depot reported Q2 sales of $47.86 billion, up nearly 6% from the year-ago period and topping estimates of $47.23 billion. Total comparable sales increased 1.7%, while U.S. comparable sales advanced 1.3%.

Net income reached $4.8 billion, or adjusted earnings of $4.92 per share, which was up 5% YoY and comfortably exceeded EPS expectations of $4.71 by more than 4%.

Management characterized demand as broad-based, with 13 of Home Depot’s 16 merchandising departments posting positive comparable sales. Customers remained active in smaller repair and maintenance projects, while the company continued to see strength from its professional customers. Digital sales were another bright spot, increasing 11% YoY.

There were also some encouraging signs within big-ticket spending. Transactions above $1,000 increased  2.4% from the prior-year quarter, helped by categories such as portable power and patio. Still, management stressed that larger discretionary home improvement projects remain under pressure.

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Home Depot reaffirmed its FY26 outlook. The retailer continues to expect total sales growth of approximately 2.5% to 4.5%, with comparable sales ranging from flat to 2% growth. Adjusted earnings per share are projected to range from approximately flat to 4% growth from FY25 adjusted EPS of $14.69.

The company's guidance incorporates tariff refunds received during the year, which management expects to help offset higher-than-planned fuel, energy, and other product input costs. During Q2, Home Depot received $730 million of IEEPA tariff refunds, with $685 million reducing cost of goods sold during the period.

Management expects higher costs to effectively offset the benefit of those refunds over the full fiscal year, helping explain why the company maintained rather than raised its outlook despite stronger-than-anticipated Q2 results.

What Home Depot Is Saying About the Consumer

Perhaps more important than the headline numbers was Home Depot's commentary on the economic environment.

Management said consumer uncertainty and housing affordability continue to restrict demand for larger projects. Housing turnover, an important driver of home improvement spending because consumers frequently renovate before or after moving, remains exceptionally weak. Home Depot noted that turnover has been stuck near historically low levels for roughly four years.

The company has seen signs of housing activity improving when interest rates decline, but said there is no clear inflection point yet. That suggests a meaningful recovery in large-scale remodeling may remain dependent on improved housing affordability and greater transaction activity.

That said, Home Depot's results hardly suggest the consumer has stopped spending altogether. Customers continue buying products for repairs, maintenance, and smaller projects, and professional-contractor demand has remained comparatively healthy.

The distinction is important as consumers appear to be prioritizing necessity and manageable projects while delaying renovations that require significant financing or larger discretionary commitments.

Lowe’s Q2 Showed Similar Consumer Pressures

Lowe’s Q2 report reinforced many of the same economic themes, though its updated outlook was more cautious.

The company generated Q2 sales of $25.95 billion, up 8% from a year ago but missing expectations of $26.13 billion. Comparable sales increased just 0.2%, with strength in Pro customers, home services and online sales offsetting continued pressure on discretionary DIY spending. Still, online sales jumped almost 16%.

Net income was $2.4 billion, while adjusted earnings were up over 1% to $4.40 per share when excluding $96 million of pre-tax expenses related to its Foundation Building Materials and Artisan Design Group acquisitions. The adjusted quarterly EPS figure also included an 11-cent benefit from tariff refunds, with Lowe’s exceeding Q2 earnings expectations of $4.22 per share by just over 4%.

CEO Marvin Ellison highlighted Lowe’s continued momentum across the Pro, online, and home-services businesses, but acknowledged persistent weakness in discretionary DIY spending. That remains particularly significant for Lowe’s given its historically greater exposure to the DIY customer.

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Lowe’s Cuts Its FY26 Outlook

Unlike Home Depot, Lowe’s lowered several components of its FY26 forecast after taking first-half results and current demand trends into account.

Lowe’s now anticipates total sales of approximately $92 billion (+6% growth), compared with its previous $92-$94 billion range. Comparable sales are expected to be flat versus the prior year, down from the previous expectation of flat to 2% growth.

The company now projects an adjusted operating margin of approximately 11.6%, compared with its earlier 11.6%-11.8% range. Full-year adjusted EPS is now forecasted at roughly $12.25, versus the prior range of $12.25-$12.75, and would be down from $12.29 in FY25.

The reduction is another indication that the home improvement recovery is developing more slowly than investors may have hoped. Lowe’s continues to gain traction with professional customers and through its digital and home-services initiatives, but those gains are not yet enough to fully counter sluggish discretionary DIY demand.

Summary & Conclusion

Home Depot emerged from the second quarter with the stronger overall message. Sales and earnings increased, comparable sales were positive, demand broadened across merchandising categories, and management felt comfortable reaffirming its FY26 outlook despite continued housing-market and cost pressures.

Lowe’s also showed underlying strengths, particularly in Pro, online and home services, but the company's decision to lower its sales, comparable-sales and earnings outlook highlights greater exposure to the continued pullback in discretionary DIY spending.

For investors, the two reports reinforce the idea that the home improvement market has stabilized in several areas but hasn’t entered a broad-based recovery. A healthier housing market could eventually provide a significant catalyst, but consumer demand for large projects remains constrained by affordability and elevated financing costs.

Home Depot stock currently lands a Zacks Rank #3 (Hold), while Lowe’s carries a Zacks Rank #4 (Sell). Given the stronger Q2 performance and maintained outlook at Home Depot compared with Lowe’s reduced expectations, HD appears better positioned to navigate the current home improvement environment, although both companies remain highly sensitive to the direction of interest rates, housing turnover, and consumer confidence.

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