The Home Depot Inc. HD continues to show defensive characteristics even as the housing backdrop remains challenging. Housing affordability and consumer uncertainty are still weighing on larger home-improvement projects, while housing turnover remains near historical lows. Management noted that turnover has stayed depressed for roughly four years and said that there is still no clear sign of an inflection point.
Despite these pressures, Home Depot delivered resilient fiscal second-quarter results. Sales increased 5.7% year over year to $47.9 billion, while comparable sales rose 1.7%. Demand was also broad-based, with 13 of 16 merchandising departments posting positive comps. Importantly, customers continued to spend on smaller repair and maintenance projects, helping offset softness in larger discretionary categories. Big-ticket transactions above $1,000 increased 2.4%, although management acknowledged that larger discretionary projects remain under pressure.
The Pro business provides another layer of resilience. Pro comps were positive and outpaced DIY, supported by investments in product assortment, delivery, sales capabilities and specialized services. Digital momentum is also strengthening, with online comparable sales rising 11% year over year for a fifth consecutive quarter of double-digit growth.
Home Depot is not fully insulated from a weak housing cycle, but its repair-and-maintenance exposure, Pro strength, market-share gains and omnichannel investments make the business relatively defensive. The company reaffirmed its fiscal 2026 guidance of flat to 2% comparable-sales growth, suggesting it can continue navigating subdued housing demand while positioning itself for eventual recovery.
How Are Peers Performing in a Weak Housing Market?
Lowe’s Companies Inc. LOW and Floor & Decor Holdings, Inc. FND are also navigating a weak housing market, with pressured big-ticket discretionary demand offset to varying degrees by repair-and-maintenance activity, Pro exposure and company-specific growth initiatives.
Lowe’s continues to display defensive qualities despite a weak housing cycle. Comparable sales rose 0.2% in the second quarter of fiscal 2026, marking a fifth consecutive quarter of positive comps, as strength in Pro, Online and Home Services helped offset softer discretionary DIY demand. Repair-and-maintenance projects also remained resilient, while disciplined expense management and productivity initiatives supported profitability amid persistent macro and housing pressures.
Floor & Decor shows some defensive characteristics despite a weak housing cycle. Second-quarter 2026 sales rose 3%, while Pro sales increased about 4% and represented roughly 55% of total sales, helping offset softness in large discretionary flooring projects. Comparable sales declined 2.1%, reflecting subdued housing turnover, but disciplined expense management, strong free cash flow and market-share initiatives supported stable adjusted earnings per share (EPS).
HD’s Price Performance, Valuation & Estimates
Shares of Home Depot have lost 27.3% in the past year compared with the industry’s decline of 31.2%.
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From a valuation standpoint, HD trades at a forward price-to-earnings ratio of 18.01X compared with the industry’s average of 16.67X.
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The Zacks Consensus Estimate for HD’s fiscal 2026 and 2027 EPS implies year-over-year growth of 2.3% and 6.8%, respectively. The company’s EPS estimate for fiscal 2026 has moved up 0.1% in the past seven days. Meanwhile, the consensus estimate for fiscal 2027 EPS has been unchanged in the past 30 days.
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Home Depot currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The Home Depot, Inc. (HD): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).