Home Depot (HD) Q2 FY2026: $685M Tariff Refund Masks a 6% Profit Drop

Home Depot's headline numbers improved, but less than half of the revenue increase came from selling more home improvement goods. Consolidated net sales rose 5.7% to $47.86 billion, yet the GMS acquisition alone contributed $1.4 billion of the $2.58 billion increase, a weaker U.S. dollar added a further $105 million, and a one-time $685 million tariff refund was booked as a reduction of cost of goods sold. Strip that refund out and operating income fell 6.1% to $6.15 billion from $6.55 billion, with operating margin compressing to 12.9% from 14.5%. Comparable sales rose just 1.8% — and got there the wrong way, with average ticket up 2.8% against a 1.0% decline in customer transactions. For a retailer whose core store segment grew 1.5% on falling traffic, the gap between reported and underlying performance is the entire story of this quarter.

Note on period labels: this filing is The Home Depot's Fiscal Q2 2026 Form 10-Q, covering the quarter ended August 2, 2026. Home Depot's fiscal 2026 ends January 31, 2027. All period names below follow the company's own convention.

1. Consolidated Balance Sheet

1-1. Major asset items

The comparison below is August 2, 2026 against February 1, 2026 — the fiscal year-end. This is a seasonal comparison, not a year-over-year one. Spring and summer are peak season for home improvement, so receivables, inventory and payables all build naturally into August. Read the percentages with that in mind.