Home Depot missed estimates for quarterly revenue and profit but kept its annual forecasts intact on Tuesday, against the backdrop of homeowners reining in spending on large-scale renovations and focusing on do-it-yourself projects.
Shares jumped 4% after earnings report.
The top U.S. home-improvement chain's results kick off a keenly watched earnings week for big-box retailers, including Walmart and Target, that will show how consumers are dealing with rising costs and sour economic sentiment.
Home Depot and rival Lowe's are grappling with soft demand as higher rates prompt homeowners to invest in essential upgrades. A gauge of U.S. homebuilder sentiment fell unexpectedly in August to its lowest level in over two-and-a-half years.
"The momentum that began in the back half of last year continued throughout the first half as customers engaged more broadly in smaller home improvement projects," CEO Ted Decker said.
Comparable sales in the U.S. rose 1.4% in the second quarter, marking its third straight quarter of growth. Analysts said the stronger demand in July was due to the late start to spring.
Shares of Home Depot were up about 1% in choppy premarket trading. Lowe's, which is set to report quarterly results on Wednesday, also rose marginally.
Home Depot had said in May it would keep prices unchanged despite shifting tariff rates, a strategy the company plans to stick with.
The company has not changed its pricing approach, Chief Financial Officer Richard McPhail told CNBC in an interview on Tuesday. Most of Home Depot's imported products sold in the quarter landed ahead of tariffs, he said.
The improvement through the quarter and reaffirmed annual guidance, as well as Home Depot not needing to raise prices despite the current elevated tariff environment, are encouraging, Telsey Advisory Group analyst Joseph Feldman wrote in a note.
Home Depot maintained its fiscal 2025 sales and profit targets. It expects overall sales growth of about 2.8% and adjusted per-share profit to decline 2% from last year.
The company posted net sales of $45.28 billion for the quarter ended August 3, compared with analysts' estimate of $45.36 billion, according to data compiled by LSEG.
Its adjusted profit came in at $4.68 per share, below expectations of $4.71.