(Alliance News) - Home Depot Inc on Tuesday reported higher first-quarter sales but lower profit, as the US home improvement retailer said results were in line with expectations and reaffirmed its full-year outlook.

The Atlanta, Georgia-based home improvement retailer posted net sales of USD41.77 billion in the three months to May 3, up 4.8% from USD39.86 billion a year earlier.

Comparable sales rose 0.6% in the quarter, compared with a 0.3% decline in the same period of financial 2025. In the US, comparable sales increased 0.4%. Foreign exchange rates positively impacted total company comparable sales by around 55 basis points.

Net earnings fell 4.2% to USD3.29 billion from USD3.43 billion a year earlier. Diluted earnings per share declined to USD3.30 from USD3.45, while adjusted diluted earnings per share dropped to USD3.43 from USD3.56.

Operating income slipped 3.0% to USD4.98 billion from USD5.13 billion, as operating expenses rose 5.7% to USD8.80 billion from USD8.33 billion. Gross profit increased 2.4% to USD13.78 billion from USD13.46 billion, though cost of sales climbed 6.0% to USD27.98 billion.

Earnings before income taxes fell 3.6% to USD4.38 billion from USD4.54 billion. Interest expense was broadly stable at USD611 million, compared with USD615 million a year earlier.

Customer transactions declined 0.9% to 391.1 million from 394.8 million, while the average ticket rose 2.3% to USD92.76 from USD90.71. Comparable customer transactions were down 1.3%, offset by a 2.2% increase in comparable average ticket.

"Our first quarter results were in line with our expectations. The underlying demand in our business was relatively similar to what we saw throughout financial 2025, despite greater consumer uncertainty and housing affordability pressure," said Chair, President & Chief Executive Officer Ted Decker.

Looking ahead, Home Depot reaffirmed its financial 2026 guidance.

The company continues to expect total sales growth of approximately 2.5% to 4.5% and comparable sales growth of approximately flat to 2.0%. It plans to open around 15 new stores in the financial year.

Home Depot forecasts a gross margin of around 33.1%, an operating margin of approximately 12.4% to 12.6%, and an adjusted operating margin of roughly 12.8% to 13.0%. The effective tax rate is expected to be about 24.3%, with net interest expense of around USD2.3 billion.

Diluted earnings per share are projected to grow approximately flat to 4.0% from USD14.23 in financial 2025. On an adjusted basis, diluted EPS is expected to grow approximately flat to 4.0% from USD14.69.

Capital expenditures are forecast at around 2.5% of total sales.

At the end of the first quarter, Home Depot operated 2,361 retail stores and more than 1,280 SRS locations.

Home Depot shares were up 0.6% at USD301.72 in New York during premarket trading on Tuesday.

By Eva Castanedo, Alliance News reporter

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