Home Depot Crushes Earnings in First Report Since CEO's Medical Leave
Home Depot posted its strongest comparable-sales growth in nearly four years, a vote of confidence in the interim leadership team running the company while CEO Ted Decker recovers from a medical leave.
Home Depot delivered a stronger-than-expected second quarter Tuesday morning, its first earnings report since longtime CEO Ted Decker stepped back for a temporary medical leave — and the numbers suggest the interim leadership team is holding the line just fine.
The home-improvement giant posted net sales of $47.9 billion, up 5.7% year-over-year and ahead of Wall Street's roughly $47.2-to-$47.5-billion estimate, according to the company's official earnings release. Comparable sales rose 1.7% overall, including 1.3% growth in the U.S. — the fastest pace of comp-sales growth the retailer has posted since late 2022, per Bloomberg.
Net earnings came in at $4.8 billion, or $4.79 per diluted share, up from $4.58 a year earlier. Adjusted diluted earnings per share hit $4.92, beating consensus estimates of roughly $4.71 to $4.73. The company reaffirmed its full-year guidance of 2.5% to 4.5% total sales growth.
Leadership in flux
The results are the first test for Home Depot's leadership shake-up. The company announced on Aug. 12 that Decker, CEO since 2022, was taking a temporary medical leave, handing day-to-day operations to senior executive vice president Ann-Marie Campbell and financial and pro-business oversight to CFO Richard McPhail, with lead independent director Greg Brenneman chairing the board in the interim.
THE HOME DEPOT HAS THE BEST MANAGEMENT TEAM IN RETAIL
The board struck a confident tone when it announced the arrangement: "The Home Depot has the best management team in retail... We are confident in Ann-Marie's and Richard's ability to lead the company during this time, and we look forward to Ted's return." McPhail echoed that in Tuesday's release: "Our second quarter results exceeded our expectations. We saw broad based demand across the business as customers continued to engage in smaller projects."
The company operates more than 2,364 stores and employs over 470,000 associates. It also flagged that tariff refunds tied to the International Emergency Economic Powers Act helped partially offset higher fuel and energy costs during the quarter.
With Decker's return date still unannounced, Tuesday's beat buys the interim team room to keep steering the company through the back half of the year — and gives investors reassurance that Home Depot's fortunes aren't tied to any single executive.