What Happens To Home Depot Stock If Shoppers Keep Visiting Less?

Yahoo Finance ·

Home Depot (HD) stock is down about 24% over twelve months, while the S&P 500 returned about 19%. Most of that gets blamed on a frozen housing market, fair enough. The quieter risk sits inside the fiscal Q2 2026 results, which beat the company’s own expectations: the growth is arriving in bigger baskets, and there are fewer of them. Home Depot Sold More In Fewer Transactions In fiscal Q2 2026 the comparable average ticket rose 2.8% and comparable transactions fell 1%. That is the whole of the comparable-sales story. Total sales of $47.9 billion grew 5.7%, while comparable sales grew 1.7%. The company’s own fiscal 2026 guide attributes that gap to the GMS acquisition, new stores, new branches and tuck-in acquisitions. Management was pleased with the performance it saw in portable power and patio, and conceded that larger discretionary projects remain under pressure. A comp carried by ticket is the more fragile kind. Some of that ticket was plain price on the same item, which management ties to unplanned cost inputs, though management calls single large purchases the outsized driver. Housing turnover has sat at historical lows for four years by management’s account, with no sign yet of an inflection point. And Those Refunds Are Already Spoken For In fiscal Q2 2026 the company received tariff refunds that cut cost of goods sold by $685 million. It did not keep the money. Management says the refunds are absorbing unplanned fuel, energy and other product input costs. Strip the refunds out and gross margin carried about 120 basis points of pressure, which management splits roughly evenly between those costs and an acquisition mix effect. Those refunds are the vast majority of what the company expects to receive in total; management calls the remainder immaterial. Management expects the refunds and those costs to cancel over fiscal 2026, and says fiscal 2027 starts clean. This is why the ticket matters. Any further cost pressure comes out of margin, or onto the price paid by a customer who is already visiting less often. So Has Home Depot Stock Already Paid For This? Partly. At $310.45 the shares sit at about 75% of their 52-week high . To justify that price on a multi-year view, the revenue growth required works out to roughly negative 1.3% a year . The market is assuming Home Depot shrinks. So the cheapness is real, and it is not where the risk lives. The low end of the fiscal 2026 total sales guide, 2.5% growth, already beats what the price assumes. The risk sits in earnings: management has reaffirmed comparable sales growth of flat to 2% and diluted earnings per share growth of flat to 4%. A ticket-led comp against a cost base management calls significant and unplanned is what turns the bottom of those ranges into the result. Watch comparable transactions when fiscal Q3 2026 is reported. That line says whether the customer came back. Would A Threat Like This Reach Your Retirement? A threat like the one above is a footnote for a diversified holder and a headline for a concentrated one. Concentration tends to arrive by accident rather than by decision. What your largest position would do to your net worth is exactly what the Trefis Wealth team computes, with the same rules-based systematic discipline that runs our High Quality Portfolio. Request a free vulnerability audit of your biggest positions .

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