Home Depot, Lowe's Headline Big Week for Retail Earnings

The latest earnings season is winding down, but that doesn’t mean this week is lacking in terms of earnings announcements.Home Depot is scheduled to release its fiscal first-quarter 2026 results on Tuesday, May 19th before the opening bell. Analysts expect a modest performance, with our Zacks Consensus Estimates calling for total revenues of approximately $41.53 billion (+4.2% YoY) and EPS of $3.42 (-3.93% YoY). The consensus estimate for EPS has been unchanged in the past 60 days.The company’s Zacks Rank currently sits at #3 (Hold), reflecting balanced but cautious expectations as the housing market remains constrained. Investors will be focused on management’s commentary regarding underlying demand trends and the trajectory for the remainder of the year.How Will Home Depot’s Performance Compare?Comparable sales are expected to be relatively flat to slightly positive. The leading home improvement retailer is reaping the benefits of its investments in AI, delivery, and supply chain optimization as recent online comps have shown. These innovations reflect enhanced digital platform capabilities and seamless integration with stores, where more than half of online orders are fulfilled.Consumer trends in the home improvement space reflect a cautious but resilient buyer. Shoppers are prioritizing essential repairs and smaller projects over large-scale renovations, driven by elevated borrowing costs and economic uncertainty.This has led to more measured spending patterns, with strength in categories tied to maintenance and outdoor living. Home Depot’s investments in its professional customer offerings and supply chain have helped it capture share in this environment, though overall ticket sizes remain under pressure compared to peak years.The interest rate environment will be a key topic on the earnings call. With 30-year mortgage rates still elevated, housing turnover remains suppressed, which historically limits big-ticket purchases. This dynamic has supported steady, albeit modest, demand for repair and maintenance projects. Home Depot’s Pro segment is likely to remain a bright spot, as contractors remain active on smaller-scale jobs even as big-ticket renovations stay selective.The SRS acquisition has emerged as a meaningful growth lever for Home Depot. Early signs of synergies, particularly through cross-selling with Home Depot HD and GMS, are encouraging. Management expects mid-single-digit organic growth from SRS in fiscal 2026, underscoring confidence in its trajectory.Lowe’s Set to Follow Home Depot’s LeadLowe’s is scheduled to report its own fiscal first-quarter results on Wednesday, May 20th ahead of the opening bell. Our Zacks Consensus Estimates project revenues of approximately $22.91 billion (+9.5% YoY) and EPS of $2.85 (+1.37% YoY).Similar to Home Depot, Lowe’s stock carries a Zacks Rank #3 (Hold), as analysts await more clarity on the pace of recovery in the home improvement sector. Like its larger peer, Lowe’s faces a challenging macro backdrop but continues to benefit from its strategic focus on the professional customer and operational improvements.Comparable sales during the quarter are expected to show modest improvement. The company has seen relative strength in its Pro segment, which now represents a growing portion of sales.Lowe’s LOW has also benefited from its expanded offerings in online fulfillment, which have helped drive engagement. The retailer is exploring AI-enabled agentic commerce, where digital assistants help customers discover and purchase products. These digital investments are supporting traffic growth and increasing the role of e-commerce in the company’s sales mix.Higher mortgage rates have kept many homeowners in place, leading to increased investment in repairs and upgrades to existing homes. Lowe’s “Total Home” strategy, which emphasizes both Pro and DIY customers, appears well-aligned with these current spending patterns.Interest rates remain a critical variable for the home improvement business. However, any meaningful decline in rates later this year could catalyze a pickup in activity. Management has previously noted that even modest improvements in affordability could unlock deferred projects, particularly in categories like appliances, flooring, and outdoor living.Bottom LineOverall, the upcoming reports should provide clarity on whether the soft patch in DIY spending has steadied. With strong balance sheets and leading positions in both the consumer and professional channels, both Home Depot and Lowe’s remain well-equipped to navigate the current environment.These two home improvement giants are positioned to benefit from any stabilization or improvement in the housing and remodel market. Any constructive commentary on comp trends or 2026 outlook could help support sentiment heading into the seasonally stronger second half of the year.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks