홈디포(HD) 2026 회계연도 2분기 실적 발표 콜: 매출 5.7% 증가, 가이던스 재확인

핵심 요약

• 2026 회계연도 2분기 매출은 전년 동기 대비 5.7% 증가한 479억 달러를 기록했습니다. 동일 점포 매출은 미국 내 1.3% 성장을 포함해 1.7% 증가했습니다.
• 조정 희석 주당순이익(EPS)은 4.92달러로 5.1% 증가했습니다. GAAP 기준 희석 EPS는 전년 동기의 4.58달러에서 4.79달러로 집계되었습니다.
• 동일 점포 평균 결제 금액은 2.8% 증가한 반면, 동일 점포 거래 건수는 1.0% 감소했습니다. 1,000달러 이상의 고액 거래는 2.4% 증가했습니다.
• 디지털 플랫폼 매출은 11% 증가하며 5분기 연속 전년 동기 대비 두 자릿수 성장을 기록했습니다. 프로(Pro) 고객 부문은 동일 점포 매출 플러스 성장을 달성하며 DIY(일반 고객) 부문 성과를 상회했습니다.
• 홈디포는 7억 3,000만 달러의 국제비상경제권한법(IEEPA) 관세 환급금을 수령했습니다. 이 중 6억 8,500만 달러는 2분기 매출원가를 차감하는 데 반영되었으며, 4,500만 달러는 재고자산에 남아 있습니다.
• 경영진은 동일 점포 매출 성장률 보합~2% 및 총매출 성장률 약 2.5%~4.5%를 포함한 2026 회계연도 실적 전망(가이던스)을 재확인했습니다.

주요 재무 데이터

홈디포는 해당 분기 동안 자본적 지출(CAPEX)에 약 8억 8,000만 달러를 투자하고 약 23억 달러의 배당금을 지급했습니다. 3개의 매장을 신규 개장하여 총 매장 수는 2,364개가 되었습니다.

사업 및 운영 성과

홈디포의 16개 상품 부문 중 13개 부문이 플러스 동일 점포 매출을 기록했습니다. 강세를 보인 부문은 수납, 전기, 철물, 동력 공구, 배관, 실내 정원, 주방, 페인트, 욕실, 실외 정원, 건축 자재, 바닥재, 목공품 등입니다.

휴대용 전동 공구는 분기 기준 역대 최대 매출을 달성했습니다. 또한 테라스, 수납 시스템, 봄 시즌 관련 카테고리에서도 견조한 수요를 기록했습니다. 그러나 규모가 큰 비필수재 및 금융 지원 프로젝트는 계속해서 압박을 받았습니다.

프로 부문은 플러스 동일 점포 매출을 기록하며 DIY 부문을 상회했습니다. 강세를 보인 프로 비중이 높은 카테고리에는 휴대용 전동 공구, 데크재, 규격 재목, 파이프 및 피팅, 패스너, 수공구, 콘크리트 등이 포함됩니다. SRS는 회사 평균을 상회하는 동일 점포 매출을 기록했으며, 모든 수직적 시장에서 플러스 성과를 나타냈습니다. 경영진은 SRS가 시장 점유율을 지속적으로 확대하고 있다고 밝혔습니다.

캐나다와 멕시코 법인 모두 회사 전체 동일 점포 매출 성장률을 상회했습니다. 환율 효과는 전체 회사와 미국 동일 점포 매출 간 격차에 약 25bp를 추가했습니다.

디지털 플랫폼 매출은 트래픽과 전환율 상승에 힘입어 11% 증가했습니다. 홈디포 앱은 회사 내에서 가장 빠르게 성장하는 디지털 플랫폼이었으며, '매직 에이프런(Magic Apron)'은 월 수백만 건의 고객 문의를 처리하고 있었습니다.

재고를 보유한 소형 배송 상품의 경우 65% 이상이 당일 또는 이튿날 배송을 완료했습니다. 대형·중량물 재고 상품 배송의 경우 18개월 동안 리드 타임을 약 45% 단축한 결과, 약 55%가 2일 이내에 도착했습니다. 홈디포는 또한 수만 개 제품을 대상으로 고정 수수료를 내면 3시간 이내 배송을 보장하는 전국 단위 '익스프레스 배송(Express Delivery)'을 출시했습니다.

경영진 실적 전망(가이던스)

홈디포는 다음과 같이 2026 회계연도 실적 전망을 재확인했습니다.

회사는 약 15개의 신규 매장과 40~50개의 신규 SRS 지점을 개설할 계획입니다. 총매출 전망에는 GMS, 신규 매장, 신규 지점 및 소규모 볼트온(tuck-in) 인수합병의 기여분이 포함되어 있습니다.

경영진은 3분기 초반 수요가 2분기와 유사한 흐름을 보였다고 밝혔습니다. 또한 연간 동일 점포 매출 전망치 범위의 양극단이 나타날 가능성은 연말로 갈수록 낮아질 것으로 보면서도, 시장 변동성과 위축된 주택 시장 여건을 고려해 기존 전망을 유지한다고 설명했습니다.

리스크 및 관전 포인트

주택 가격 부담 능력과 역사적으로 낮은 주택 거래율이 대규모 주택 개선 프로젝트에 계속 부담을 주고 있습니다. 경영진은 금리가 하락할 때 간헐적인 개선이 나타나기는 했지만, 주택 거래율의 변곡점 징후는 나타나지 않았다고 밝혔습니다.

동일 점포 거래 건수는 1.0% 감소했으며, 소규모 수리 및 보수 활동이 수요를 뒷받침했음에도 불구하고 규모가 큰 비필수재 프로젝트는 여전히 압박을 받았습니다.

연료, 에너지, 수지, 금속 및 기타 제품 원자재 비용이 회사의 당초 계획을 초과했습니다. 경영진은 이러한 비용 압박이 관세 환급으로 인한 연간 경제적 이익을 상쇄할 것으로 예상합니다.

관세 환급 시점이 2분기 매출총이익률에 긍정적인 영향을 미쳤으나, 3분기에는 상쇄 효과를 낼 것으로 예상됩니다. 경영진은 4분기 매출총이익률이 전년 동기 대비 비교적 보합세를 유지할 것으로 전망합니다.

상품 재고자산은 약 20억 달러 증가한 반면, 재고자산 회전율은 4.5회로 하락했습니다. 투고자본이익률(ROIC) 또한 27.2%에서 24.8%로 하락했습니다.

애널리스트 Q&A 주요 내용

관세 환급 및 이익률: 홈디포는 6월 말경 7억 3,000만 달러의 IEEPA 관세 환급금을 수령했습니다. 2분기에 인식된 6억 8,500만 달러는 매출총이익률에 약 145bp의 개선 효과를 가져왔습니다. 이는 약 60bp의 비용 증가분을 상쇄했으나, GMS 및 밍글도프스(Mingledorff's) 인수 믹스로 인해 약 60bp의 추가적인 역풍이 발생했습니다. 남은 4,500만 달러의 환급금은 재고자산이 회전함에 따라 손익계산서에 반영될 예정입니다.

기초 수요 및 시장 점유율: 경영진은 2분기 성과가 주로 회사 자체적인 이니셔티브 덕분이라고 설명하며, 홈디포가 어려운 시장 환경 속에서도 점유율을 확대했다고 밝혔습니다. 그 이유로 역대 최고 수준의 매대 상품 구비율, 더 빠른 물류 이행, 제품 혁신, 강화된 매장 실행력을 꼽았습니다. 회사는 주택 관련 수요에서 광범위한 회복세는 확인하지 못했다고 언급했습니다.

매출 추이: 회사의 월별 동일 점포 매출 성장률은 5월 1.2%에서 6월 1.5%, 7월 2.3%로 개선되었습니다. 경영진은 날씨와 극심한 폭염 시점이 공시된 월별 패턴에 영향을 미쳤으나, 기저 성과는 분기 전반에 걸쳐 보다 일관되었다고 설명했습니다.

평균 결제 금액: 경영진은 2.8%의 결제 금액 증가가 동일 SKU의 평균 소매가 변경, 냉장 가전·휴대용 전동 공구·테라스 등 카테고리의 대형 단일 품목 구매, 고객의 고가 제품 구매 및 계절적 믹스에 기인한다고 설명했습니다.

프로 생태계 및 교차 판매: 경영진은 SRS와 GMS 간에만 국한되지 않고 전체 홈디포 시스템 전반에서 연간 4억 달러 규모의 교차 판매 기여가 예상된다고 확인했습니다. 지난 12개월 동안 전체 매장의 90%가 홈디포의 견적 센터 기능을 활용해 SRS를 통한 판매를 완료했습니다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Greetings, and welcome to The Home Depot Second Quarter 2026 Earnings Conference Call.

[Operator Instructions]

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Isabel Janci. Please go ahead.

Isabel Janci

Thank you, Christine, and good morning, everyone. Welcome to The Home Depot's Second Quarter 2026 Earnings Call. Joining us on our call today are Richard McPhail, Executive Vice President and Chief Financial Officer; Ann-Marie Campbell, Senior Executive Vice President; and Billy Bastek, Executive Vice President of Merchandising.

[Operator Instructions]

If we are unable to get to your question during the call, please call our Investor Relations department at (770) 384-2387. Before I turn the call over to Richard, let me remind you that today's press release and presentations made by our executives include forward-looking statements under the federal securities laws, including as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties and that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to the factors identified in the release and in our most recent annual report, Form 10-K and other filings with the Securities and Exchange Commission.

Today's presentation will also include certain non-GAAP measures including, but not limited to adjusted operating margin, adjusted diluted earnings per share and return on invested capital. For a reconciliation of these and other non-GAAP measures to our corresponding GAAP measures, please refer to our earnings press release on our website.

Now let me turn the call over to Richard.

Richard McPhail

Thank you, Isabel, and good morning, everyone. Before turning to our results, we want to touch on Ted's temporary medical leave of absence, which we announced last week. We wish Ted a quick recovery and appreciate the support that has been shown by so many Home Depot partners. We look forward to Ted's return in a few months, and we will share any material developments as appropriate. Ann and I are supported by an exceptional leadership team and a dedicated Board and together, we are wholly focused on executing our strategy and winning in our market.

Turning to the quarter. Sales for the second quarter were $47.9 billion, an increase of 5.7% from the same period last year. Comp sales increased 1.7% from the same period last year and comps in the U.S. increased 1.3%. Adjusted diluted earnings per share or $4.92 in the second quarter compared to $4.68 in the second quarter last year. Our second quarter results exceeded our expectations and our teams did a great job executing throughout a dynamic environment. Our customers continue to engage in home improvement projects. And throughout the quarter, we saw broad-based demand across the business.

In the U.S., our Northern and Western divisions posted positive comps and Mexico and Canada posted positive comps. While consumer uncertainty and housing affordability continue to pressure demand for larger home improvement projects, we remain focused on what we can control, our strategy to have our core culture, delivering a frictionless interconnected experience and winning the Pro.

With that, I'll turn it over to Ann.

Ann-Marie Campbell

Thanks, Richard, and good morning, everyone. Driving our core and culture is at the heart of what we do every day to deliver the best experience for our customers. To do this, we continue to invest in our store experience. Our teams are focused on ensuring on-shelf availability remains at record levels on introducing new and innovative products and deploying technology across the stores to enhance the customer experience. This, coupled with all of our investments in our associate experience through technology-enabled tools, makes it easier than ever for associates to serve customers. And we have seen greater associate engagement better customer satisfaction scores and stronger sales.

A great example of how we are building on the momentum that we are seeing is to the evolution of Magic Apron. In addition to our website, now associates and customers can utilize this application in our [indiscernible] to navigate our stores more efficiently, find products within seconds and ask questions about products and projects that feel more confident in their ability to complete a home improvement project. Customers' feedback has been incredibly positive. In terms of our interconnected experience, we are making progress on a multitude of initiatives included delivery. We know speed of delivery is important to our customers, and today, for in-stock [indiscernible] of products, over 65% of our deliveries or same day or next day. And we're continuing to get faster.

In fact, this month, we launched Express Delivery nationwide with delivery on tens of thousands of products in 3 hours or less. In addition, we've evolved our clients delivery model to better serve the rest purchases. We now stock a select assortment of appliances that can reach our customers next day in certain markets. We are seeing a sales lift in these markets and will continue to lean in to broaden these efforts. And we are winning with the Pro.

Pro positive comp in the quarter, and we saw strong performance across all or poor cohorts. This is being driven by the many investments we have made across our systems, capabilities for Pros, product assortment, [indiscernible] lot quantities, delivery, sales teams and specialized services. There is more to do, but it is evident that we are serving our Pro better than ever, and this partnership with our customers creates a sticky and lasted relationship.

In closing, I'd like to thank all of our associates for their hard work this quarter. I'm pleased to announce that based on our first half results, 100% of our stores qualified for Success Sharing, our profit sharing program for hourly associates. These results were a testament to our investment across the business and our associates focus on customer service.

With that, I'll turn it over to Billy.

William Bastek

Thank you, Ann. Good morning, everyone. I want to start by also thanking all of our associates, suppliers and supply chain partners for their ongoing commitment to serving our customers and communities. As you heard from Richard, our performance during the second quarter exceeded our expectations as customers continue to engage in smaller repair and maintenance projects.

In the second quarter, we saw a broader engagement with 13 of our 16 merchandising departments posting positive comps, including storage, electrical, hardware, power, plumbing, indoor garden, kitchen, paint, bass, outdoor garden, building materials, flooring and millwork. During the second quarter, our comp average ticket increased 2.8% and comp transactions decreased 1%. Big ticket comp transactions or those over $1,000 were positive 2.4% compared to the second quarter of last year. We were pleased with the performance we saw in portable power and patio. However, largely discretionary projects remain under pressure.

During the second quarter, Pro posted positive comps and outperformed DIY. We saw strength in DIY across many spring-related categories, including live goods, mulch, soils, hardscapes, storage, patio and grills. And for Pro, we saw strength across many Pro-heavy categories like portable power, decking, dimensional lumber, pipe and fittings, fastener, hand tools and concrete.

Turning to total company online comp sales. Sales leveraging our digital platforms increased 11% compared to the second quarter of last year. This is the fifth quarter in a row with double-digit year-over-year growth driven by our ongoing investments across our interconnected platforms. Delivering the best interconnected experience is a key component of our strategy, and our factor delivery speeds are resonating with customers and driving greater engagement.

As Ann mentioned, we have made meaningful progress with our delivery speeds. This progress extends beyond parcel products. For big and bulky products, we've also increased speed of delivery significantly. To put this in perspective, over the last 18 months, we've reduced our delivery lead times approximately 45% in the U.S., which is leading to greater conversion with our customers and now approximately 55% of our big and bulky deliveries on products we stock are delivered within 2 days.

Going forward, we will continue to further optimize fulfillment across all of our assets to better serve our customers and enhance the interconnected shopping experience. During the second quarter, we leaned into products and projects that are resonating with our customers.

We are focused on innovation, expanded assortments and reduced friction points, all to deliver a compelling value proposition. For example, we continue to see tremendous success in power. In fact, Q2 was a record-setting sales quarter for portable power tools. As we've mentioned before, we have built a strong competitive advantage with our extensive lineup of battery-powered platforms that allows us to continue to grow share in these categories.

Another category where we continue to see strong performance in storage as we lean into our branded systems and expanded assortments. The [indiscernible] Pack-out, our largest national loyalty brand for Pros has the industry's most versatile and durable modular storage system with solutions for toolboxes, organizers, racks and many more.

These modular units provide our Pros with easy access to all their tools at their job sites and at their homes. And in appliances, we recognize that in the current environment, there is a growing shift towards direct purchases which is why we have been making advancements in our supply chain capabilities more easily and quickly get product to the customer.

As a result of our investments, we are now able to provide next-day delivery coverage on key SKUs to nearly 60% of the population. We are encouraged with the positive performance we are seeing in these markets, and we'll continue to expand population coverage and SKUs throughout the year. In addition, we are expanding our relationship with USG across our business. The Home Depot will be the exclusive launch partner for USG's newest innovation, ultralight tough gypsum panels in the big box retail channel, further solidifying our leadership as the go-to retailer for Pro preferred building materials.

This product stands out as the lightest and most durable half-inch panel in the market. We're also accelerating growth with another key Pro exclusive. Ruko joint treatments. Ruko has driven strong Pro loyalty with us for decades, and we are excited to expand their product lineup across our stores. As we look ahead to the third quarter, our merchandising organization remains focused on being our customers' advocate for value. This means continuing to provide a broad assortment of best-in-class products that are in stock and available for our customers when they need it.

With that, I'd like to turn the call back over to Richard.

Richard McPhail

Thanks, Billy. I'll now spend a few minutes on our financial update for the quarter. In second quarter, total sales were $47.9 billion, an increase of $2.6 billion or 5.7% from last year. During the second quarter, our total company comps were positive 1.7% with comps of positive 1.2% in May, positive 1.5% in June and positive 2.3% in July. Comps in the U.S. were positive 1.3% for the quarter with comps of positive 0.5% in May, positive 1.2% in June and positive 2.2% in July. In the second quarter, we received IEEPA tariff refunds, which reduced our cost of goods sold by $685 million. While these refunds were received in the second quarter, they are being used to offset unplanned and rising cost pressures throughout the year.

In the second quarter, our gross margin was 33.7%, an increase of approximately 25 basis points from the second quarter of last year, which was primarily driven by the benefit from the IEEPA tariff refund, largely offset by incremental cost pressures related to fuel, energy and other product input costs as well as a change in mix as a result of the GMS acquisition. Our underlying gross margin performance was in line with our expectations.

During the second quarter, operating expense as a percent of sales increased approximately 45 basis points to 19.4% compared to the second quarter of 2025. Our operating expense performance was in line with our expectations. Our operating margin for the second quarter was 14.3% compared to 14.5% in the second quarter of 2025. In the quarter, pretax intangible asset amortization was $178 million. Excluding the intangible asset amortization in the quarter, our adjusted operating margin for the second quarter was 14.7% compared to 14.8% in the second quarter of 2025.

Interest and other expense for the second quarter decreased by $26 million to $524 million. In the second quarter, our effective tax rate was 24.5% compared to 24.2% in the second quarter of fiscal 2025. Our diluted earnings per share for the second quarter were $4.79 compared to $4.58 in the second quarter of 2025. Excluding intangible asset amortization, our adjusted diluted earnings per share for the second quarter were $4.92, an increase of 5.1% compared to the second quarter of 2025. During the second quarter, we opened 3 new stores, bringing our total store count to 2,364.

At the end of the quarter, Merchandise inventories were $26.8 billion, up approximately $2 billion compared to the second quarter of 2025 and inventory turns were 4.5x, down from 4.6x last year.

Turning to capital allocation. During the second quarter, we invested approximately $880 million back into our business in the form of capital expenditures. And during the quarter, we paid approximately $2.3 billion in dividends to our shareholders. Computed on the average of beginning and ending long-term debt and equity for the trailing 12 months, return on invested capital was 24.8%, down from 27.2% in the second quarter of fiscal 2025.

Now I will comment on our outlook for fiscal 2026. Our performance during the second quarter exceeded our expectations. We are encouraged with the underlying demand we see in the business, and we are reaffirming our fiscal 2026 guidance. We expect to continue to grow our market share and for our comp sales to range between flat to 2% growth with total sales growth of between approximately 2.5% and 4.5%, reflecting the contribution of the GMS acquisition, new stores, new branches and tuck-in acquisitions.

For the year, we expect SRS to deliver mid-single-digit percent organic sales growth. We plan to open approximately 15 new stores and 40 to 50 new SRS branches. Our gross margin is expected to be approximately 33.1%.

Further, we expect operating margin of approximately 12.4% to 12.6% and and adjusted operating margin of approximately 12.8% to 13%. Our effective tax rate is targeted at approximately 24.3%. We expect net interest expense of approximately $2.3 billion. We expect our diluted earnings per share and adjusted diluted earnings per share to both increase approximately flat to 4% compared to fiscal 2025. We plan to continue investing in our business with capital expenditures of approximately 2.5% of sales for fiscal 2026. We believe that we will continue to grow market share as a result of our competitive advantages and ongoing investments by delivering the best experience in home improvement.

Thank you for your participation in today's call. And Christine, we are now ready for questions.

Operator

[Operator Instructions]

Our first question comes from the line of Chuck Grom with Gordon Haskett.

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Charles Grom

Bill, I was hoping you could comment on the broadening of the category strength in the quarter. I think you called out 13 areas. I guess, double-click on where you're seeing the strongest parts of the business and the outlook in the back half?

William Bastek

Yes. Thanks, Chuck, for the question. Yes, as I mentioned in the prepared remarks, we saw 13 categories of our 16 positive comp. And we had -- if you think about the core of our business, electrical, plumbing, hardware tools, both in-store and online. We had great performance online. I mentioned the double-digit positive comps. Those businesses were even greater than the online comp, but really the middle of the store and to put that in context, if you look at our top 20 businesses across the store that drove a positive performance, only 3 of those 20 were actually in the seasonal business. So we feel really good about what's happening in the middle of the store and certainly a much broader-based impact, as we mentioned in the prepared remarks.

Charles Grom

Okay. That's great. And then, Richard, just on the tariff refund of $685 million. Can you speak to how much of that was for inventory that flowed through the P&L in 2Q versus how much flow through the P&L in prior quarters. And I guess are you expecting any more refunds to help you in the back half of the year? And then when we think about next year and the lap of that $685 million. How should we think about that in terms of the gross margin impact?

Richard McPhail

Yes. Great. Thanks for the question. So let me just -- let me give you some numbers to clarify the tariff refunds and then we'll talk about how this works through the year. So -- and then into next year. So we received $730 million in tariff refunds during the quarter. We received all those right around the end of the month of June. And those refunds represent the vast majority of what we would expect to receive for those IEEPA refunds that we filed for, there's an immaterial amount that we expect we may receive in the back half. Of that $730 million, $685 million reduced our cost of goods sold as they applied to products that have already been sold.

The remaining $45 million remains in inventory and will hit the P&L as we turn inventory through the remainder of the year. And so let's just talk about the shape of the year, how this impacts the shape of the year because your question is lapping into next year. So thinking about how they impacted the quarter. The $685 million reduction in COGS was about 145 basis point gross impact to margin. As we said in our prepared remarks, those benefits offset increased costs that we've seen in our cost base of about 60 basis points.

So you can think about the net benefit of refunds in our P&L being around 85 basis points. And just to tie out the numbers on gross margin real quickly, we also had the mix impact of the GMS and Mingledorff's acquisitions have an impact of about 60. So net benefit of tariff of 85 basis points, mix impact of 60, so that gives you the year-over-year increase of about 25 basis points.

So just talking about the nature of refunds, while we received those refunds in the second quarter, we've also experienced unplanned pressure from fuel, energy and other product input costs that we expect will fully offset the benefit from tariff refunds over the year. And so if you think about the shape of the P&L, while those refunds are going to go to offset costs in, call it, Q3 -- sorry, Q2 and Q3 because we book all of the refunds when we receive the cash, you are going to see a little bit of a P&L shift between Q2 and Q3.

And Billy, maybe just talk about the environment we're in and how we've looked at tariffs.

William Bastek

Yes. I mean you mentioned, Richard, some of the inputs, the incremental inputs to what we planned coming into the year. Certainly, we've seen incremental cost pressure related to fuel, energy, other product inputs, you can think of commodities with resin and metals, so we didn't have that in our plan as we came into the year. So those are incremental. And then the other piece I would mention that maybe gets overlooked is there's been some changes in tariffs incrementally relative to our planning process coming into the year, Section 101 expired in July, it was updated in February, expired in July and replaced with the Section 301 piece. So those are actually also incremental to what we had forecasted coming into the year. So we're doing a great job of offsetting that. The merchant is doing a great job with our supply chain teams, but those are incremental pressures that we do not have as part of our outlook for 2026.

Richard McPhail

And so Chuck, just to get back to your question, because we expect the tariff refunds to be fully offset by the incremental cost pressure that Billy called out. We've reaffirmed our guidance for the year. And so while you might see some timing, some lapping next year on a quarterly basis that we'll need to take you through, there shouldn't be a lap from an annual perspective when we head into 2027.

Charles Grom

Makes a lot of sense. And our best to Ted and his recovery.

Operator

Please proceed with your question.

Scott Mushkin

Two questions. First, just 1 more clarification on the comments on the cost pressures. Are we to assume an incremental 60 basis points of pressure in 3Q and 4Q at least relative to initial plan? And then second, while higher rates, which obviously we're seeing in markets right now, certainly don't help. Based on your internal models, do higher rates actually hurt here? Or do you think most of the damage has already been done?

Richard McPhail

Sure. Thank you, Scott. I think you should think about this and the way we're thinking about it is tariff refunds are going to offset costs in really a period sort of over Q2 and Q3. And I think what we would expect to see is that our gross margin rate in the fourth quarter will likely be right around flat compared to last year. So this is sort of a Q2 and Q3 dynamic, which obviously just has a little complication of the timing of the receipt of the refunds.

With respect to rates, I think we -- as we've said over the past few years, housing turnover just as 1 kind of 1 point in the economy that we watch has been at historical lows. It has never been lower as a percentage of the housing stock and every time we've seen it hit the, sort of, 3% of the housing stock changing hands. Over history, it's always bounced up relatively quickly. We've seen housing turnover at these low levels for 4 years now.

So I don't think that we've seen much volatility from the recent increase in rates. We do know that when we see step downs, we began to see a little bit of life come into housing, but there's just no sign of an inflection point at this moment.

Operator

Our next question comes from the line of Seth Sigman with Barclays.

Seth Sigman

Great. Wishing Ted a quick recovery from our side, too. I wanted to ask about the gap between total comps and Home Depot U.S. comps. It looks like it was the widest gap in a couple of years. Can you talk a little bit more about that and perhaps separating SRS, what's happening there? Is that business back to positive in terms of comps and then also just the international performance?

Richard McPhail

Great. Yes. Look, we were really pleased to see -- so that gap between telecom and cap in the U.S. First, it reflects FX benefit of about 25 basis points. But we also had fantastic performance internationally and at SRS and maybe we'll talk about what we're seeing internationally.

Ann-Marie Campbell

Yes. No, both Canada and Mexico outcome, the company which was fantastic. And I know we called out Canada last quarter, but it was great to see the acceleration in Canada. And for the half, they just had a fabulous quarter as where the positive comp in transactions and positive company units, which is fantastic. And Mexico has just been on this great run, and they continue to be on a great run, and we are just continuing to see the great results from that team as well. So this was just not a U.S. performance this was across the company. So really proud of the entire team, not only in the U.S., but Canada as well and Mexico.

Richard McPhail

Absolutely. And SRS comped above the company average this quarter, they were positive comp in all verticals, and it looks like they're taking significant share. So we couldn't be more pleased with that acquisition and how we're all working together.

Seth Sigman

Okay. Great. And then as we think about the comp guidance for the full year, I think it implies a pretty wide range of scenarios for the back half. The midpoint looks like it would be similar to the first half but below the Q2 trend despite easier comparisons. So I guess, how are you thinking about the scenarios and anything else, any other building blocks that think about the comps for the second half of the year.

Richard McPhail

Sure. Look, we are really encouraged by the performance by our teams this quarter and exceeded our expectations for the quarter. We have had a start to Q3 that's really consistent with the demand we saw in the second quarter. But we know what the environment is out there. We have a lot of volatility. As Billy said, we've got unplanned cost pressure that's significant in the market, and we have frozen housing conditions. And so with all of that, we're focused on controlling what we can control. We do think that the range remains appropriate. We think that, obviously, the further we go into the year, the extremes of the range become less likely, but we're just -- we're focused on controlling what we can control.

Operator

Our next question comes from the line of Michael Lasser with UBS.

Michael Lasser

We're all trying to figure out how much of the Home Depot performance in the second quarter was a reflection of the actions that the company is taking an idiosyncratic to The Home Depot versus reengagement from the consumer in home improvement. And so with that being said, if you could slice and dice it maybe 2 simplistic ways. One is your comp accelerated from the first to the second quarter by 110 basis points, again, simplistically, how much of that do you think was accelerated market share gains versus the home improvement market accelerating a touch from the first to the second quarter? And second, are you seeing evidence of the consumer reengaging through things like app downloads, increased quotes through the bedroom and/or more usage of the Magic Apron that gives you some degree of confidence that the bottom has been reached in home improvement demand and it's going to get better from here?

Richard McPhail

Thanks, Michael. So look, Ann and Billy are going to bring this to life. But the headline here for us this quarter is that our teams took share in a difficult environment. We're confident the investments that we've made are positioning us like no one else in the market and when we look out at the broader market, all the data that we see, what we hear from other constituents in the market is that there is -- there remains tremendous pressure on our sector and on any one connected with housing. So when we look at our results with that overlay, we're confident we're taking share, and it really -- it all starts in the stores. And so Ann, maybe let's just talk about what we're doing.

Ann-Marie Campbell

Yes. No, thanks. Michael, we're seeing customers respond just so positively to the initiatives we're driving to further empower our associates and deliver great customer service. And to be honest, it's simple, but it's important. It starts with the right product on the shelves in the quantities and specification the customer wants. And we have been on this journey to improve our on-shelf availability and it remains at record levels. And why is that so important for us. This is kind of foundational to driving great customer service. And for me and for the team, a high level of operational reliability, especially as stores play a more important role in delivery and fulfillment of our interconnected experience. So -- but when you think about connectivity with our digital assets, it's better and faster fulfillment [ option ]. It's about having the best products and brands that customers want. So -- and Billy and team have just been laser focused on driving innovation across the board and their continuous effort, it's just been fantastic. So Billy, innovation wins every day and your merchants are just fabulous.

William Bastek

Well, we appreciate that. No, Michael, it's a good question. We ask ourselves know that a lot. We're probably tougher critics on ourselves than anybody actually. But there's a number of different factors. I would go back to my prepared remarks. I mean, we are really pleased with our results, and we saw great strength across our entire business, and there's still a lot of pressure, obviously, on larger projects, discretionary finance projects. I mean that's a continued narrative that we're still seeing in the business. But we just announced express delivery today nationwide across all stores that Ann talked about in a number of different things I mentioned big and bulky.

And a lot of those come from out of our stores. So our store associates, our supply chain associates are doing an incredible job, and we're just trying to meet customers where they are and it all starts in the middle of that store. And so we're really thrilled with the performance and the work that the teams are doing and hats off to the merchant group and all the work they're doing with our vendor partners.

Ann-Marie Campbell

And you called out, Michael, Magic Apron and Jordan is in the room. And I think that is a really important enabler when we think about taking friction out of the experience, both for the associate and customer. So Jordan, the team have just had just fantastic feedback across the board. So you want to kind of lean into just the Magic Apron component?

Jordan Broggi

Yes, absolutely. I mean, Michael, you referenced online and to Billy's comments, online grew 11% in the quarter, and we had an increase in traffic and an increase in conversion. You referenced the app. The app was our highest growth surface on all of our digital services, and that was exciting. And that's ahead of the planned refresh that we told you we've got coming in the back half, which is great.

And then on Magic Apron, we're getting millions of questions per month now on Magic Apron that has continued to grow. It's been a great tool for our customers. We've had great feedback. And Ann's references this morning were really to a more localized version of Magic Apron that understands the store context and where you are in the store because the nature of your questions and the nature of the help that we can give you is better if we understand, "Hey, you're in this store, let's talk about the inventory that's in the store first and so on. So really excited about the engagement digitally, for sure.

Richard McPhail

Jordan, while we're on it. We've made a lot of investments and Billy called out Express. Maybe just we had an exciting release.

Jordan Broggi

Yes. So we did put out a press release this morning on express delivery. And I'd say there, we've been working for the past couple of years on building the fastest fulfillment and home improvement and that's been a joint effort across merchandising stores, supply chain, technology. We've talked to you about ship from best location as being a technology that we've leveraged to really bring all of the assets together for fast delivery. As Billy referenced, we're 65% now, same day, next day on parcel that we stock and 55% 2-day both big and bulky. And then this morning, what we announced is Express, we've been -- we've had this in some markets for several months, but we just announced a nationwide rollout. This is on homedepot.com, a customer can pay a small flat fee and get delivery within 3 hours. Now the majority of those deliveries are actually happening in less than 1 hour. And so we'll continue to work that promise time down to customers in the months ahead, but super excited about that. You could be a homeowner working in the yard, you'd need one more bag of seed or one more bag of fertilizer to finish, get a quick delivery, could be a Pro on the job site, needs some plumbing or other products. And we're really excited about what that does for customers to add on to our broader delivery speed efforts.

Michael Lasser

Helpful information. My follow-up question is on the gross margin. There's some discussion in the market this morning around did Home Depot miss the consensus profitability forecast for the second quarter if one were to exclude the tariff refund. So with that being said, Richard, if you could walk us through the factors that led to 117 basis points of gross margin pressure, excluding the tariff refund in the second quarter, that would be super helpful and to mentioning what is going to be ongoing versus what is onetime in nature?

Richard McPhail

Sure. Look, Michael, it's -- so I first want to talk about our consistent ability to deliver results and maintain stable gross margin. And we'll come back to that. But if you look at 2025 -- let's take 2025 as an example, we had a significantly different cost environment during the year than we expected when we entered 2025. And if you look at our results, we hit our gross margin plan on the button if you put acquisition mix impact aside. And so -- and I'd say, in fact, the history of Billy and his team over the last 5 or so years is that we've had unprecedented volatility in our cost environment and yet we have delivered year after year after year.

What tariff refunds allowed us to do was offset increased costs in our environment, and it allowed us to maintain value in the market. If you think about tariff refunds are a market born benefit, they're not unique to The Home Depot. And so you would expect when you see market born benefits or market born pressures, we are using those benefits to offset costs and the market is seeing that in the form of values that have been maintained through the quarter in the face of a pressured cost environment. So just going through the -- you called out the math, I'll just call it around 120 -- 120 basis point pressure. 60 basis points of that is in the form of increased cost that we were able to offset with tariff refunds. And then the other 60 basis points was simply the mix impact of GMS and Mingledorff. Recall that we acquired GMS in September of '25. And so that's just a lap of GMS not being on our books in Q2 of last year. So I'm confident and Billy is confident, had we not had tariff refunds. We would have exceeded our expectations for the quarter regardless. It just came in a different form. Bill, anything you want to add on that?

William Bastek

No. [ That's right ].

Operator

Our next question comes from the line of Kate McShane with Goldman Sachs.

Katharine McShane

We wanted to focus our question on ticket. We know this is one of your stronger comps, but it did appear all ticket led. Can you just speak to the dynamics within ticket? And just how much was from the same SKU inflation that you may have seen during the quarter and anything else that may have contributed during Q2?

Michael Lasser

Yes. Thanks, Kate, for the question. There was some same SKU AUR, as we've talked about previously on calls based on some of the cost inputs and so forth. We also saw categories, as I mentioned, refrigeration, portable power, patio, larger ticket items, you think single purchase items not financed, but think more single purchase items that really help drive that as well. We had some inter-category mix with people trading up inside of categories. And then you've got, kind of, mix as part of that, just Q2 being the season that it is and selling more riders as one example. But really think of single purchases being the outsized impact, as I mentioned, our comps of over $2,500.

Katharine McShane

Okay. And just a follow-up question to that. I know in an answer to another question, you talked about the extremes of the comp, but if that ticket were to hold for the rest of the year, and traffic were to get slightly better, wouldn't we be, kind of, at the higher end to maybe above the highest end? And what would that mean? And what would the scenario be in which we could see that?

William Bastek

Well, that's certainly -- yes, Kate, that's certainly the math of it, as you mentioned, for sure. There's still so much volatility, as Richard mentioned, that we think we gave the prudent guidance and we'll be back in at the end of Q3 and give a broader view for the end of the year.

Operator

Our next question comes from the line of Christopher Horvers with JPMorgan.

Christopher Horvers

So following up on the, sort of, underlying demand of the business, there are always a lot of weather impacts in the first half of the year. How do you look at the monthly performance during 2Q given the softer start weather probably hurt, but also accelerated tax in July. So as we try to tease out the right underlying trend, how do you think about that? And related to that, on the SRS side. I think as far as comp below the company average in the first half, I think they were up in 2Q, down in 1Q. So given that mid-single-digit comp expectation, does the gap between the U.S. and the total comp actually widened in the back half of the year given it looks like SRS becomes more accretive to the total.

William Bastek

Yes, Chris, it's Billy. Let me take the first part, and then we'll circle back on the SRS piece. As it relates to the monthly cadence and you've mentioned some of the weather pieces, there's actually just to really small pieces that drove that. In 2025, we typically get one week a year in the country that has significant heat. It's as simple as this. In 2025, that happened at the end of June. So that would have been in our period 5 number. And then in 2026, this past quarter, that happened in the July comp. So that shift in and of itself would have normalized both the June and July comps. And then I'll just go one step further as it relates to May. And obviously, you have the spring portion there that's heavily driven by the North. But week 14, which obviously would have been our first week of the quarter, we saw significantly bad weather everywhere across the country. And when you extract just that week out from May, May was literally the exact same comp performance as we had in June and July when you just do the offset for AC. So very consistent across the board. And as I mentioned earlier, only 3 of our 20 top classes of business were seasonally related for the balance of the quarter as well.

Richard McPhail

And as far as SRS goes, it's true that they have accelerated through the year. They in the back half of 2025, we saw the least amount of storm activity in many years, and SRS was pressured by the lack of that activity. And you could actually see that in statistics that are published out in the market. I think shingle shipments, Billy, were down 27%, 29% or something like that in the fourth quarter?

William Bastek

Yes. That's right.

Richard McPhail

But look, we're early in the second half, and we'll see how that all pans out. We do expect that SRS will deliver mid-single-digit organic growth for the year. But I think it's also important to point out things that we're excited about. It's not just SRS by itself, but how all of this is coming together and look, when you talk about the Pro, it really starts in the stores. And when we think about SRS, and maybe let's talk about what we're seeing in the center of a quote center, same stores and [indiscernible].

Ann-Marie Campbell

No. super excited about what SRS been to the table and what we are enabling in the store. So for many of you, you know quote centers are our marketplace that has historically allowed our stores to enable larger product sales through this third-party network that we -- of distributors. Now that we own SRS and GMS, to your point, Richard, our Pro and sales team have access to the SRS phone catalog and now we're able to close sales within The Home Depot family, which is just fantastic, giving our customers this high level of service capability than before.

And just a couple of stats, I think, which is pretty, kind of, exciting, is that sales through the quote center facilitated by SRS is growing rapidly and the adoption is fantastic. And within the last 12 months, 90% of our stores have closed a sale through SRS. And so when you start there, and associates in-store understand the full catalog and the capability that SRS will -- it brings, it just brings confidence to that entire team, and we're able to leverage the entire ecosystem.

William Bastek

And so it really -- it starts with the stores and then expands to really the -- all the components we've built in Pro and just specifically at SRS again, we're capturing significant incremental sales to homebuilders, commercial customers and remodelers across the verticals because you think about the combination of product catalog across Home Depot and SRS like Ann pointed out, and now GMS and HVAC, this expanded catalog is resonating, and our Pro customers tell us that what we're building is unique and it's truly compelling for them.

Christopher Horvers

And my follow-up is, as you think about the tariff dynamics in the second quarter and how it plays out into the back half and into 2027, was there any SG&A shift into 2Q that is some of the offset to the gross margin -- negative gross margin headwind in the third quarter. And then as you get to '27, the message is we're starting clean into '27, so we're going to build off where our guide is currently. So is the message that ultimately should oil prices and energy prices stay here will do something, whether it's pricing or efficiencies that will ultimately mitigate that, so it's not a [indiscernible] in the out year?

Richard McPhail

So that's right. I think the most important point you made there is that we've reaffirmed guidance and our jumping off point from the end of the year is a clean jumping off point. With respect to Q2 expenses, I think we gave the indication earlier this year, expenses are going to be a little bit lumpy through the year. We had FIFA marketing expense, which [indiscernible] being an incredible campaign for us, by the way, and so I wouldn't really put much into the expense over the year, that will likely land exactly where we anticipated it would. But look, we're accustomed to managing any cost environment, right, Billy?

William Bastek

Yes. I mean this almost seems normalize a little bit from where we've been historically and certainly in 2025, [indiscernible] much or all of the teams feel that way. But listen, we've got a great track record of being able to manage that inflationary environments, deflationary environments and feel great about our ability to be able to create value for our customers every day, the most important thing and continuing to enhance the capabilities that we've talked about today. and work towards that frictionless customer experience.

Operator

Our next question comes from the line of Zhihan Ma with Bernstein.

Zhihan Ma

Just a follow-up on the ticket side of things. As you start lapping some of the tariff-driven price increases from last year, but obviously, you're also facing continued cost headwinds. How do you think about AUR for the back half of the year? And is there going to be any need for price reinvestment?

William Bastek

Yes. Thanks, Zhihan. I think that, that's factored into our guide for the back half of the year that Richard talked about a little bit earlier. So we don't see any changes from what we've already communicated.

Zhihan Ma

And a longer-term question, you recently announced an organizational realignment. I think a couple of weeks ago, could you just share a bit of color on why the changes in the line now?

Richard McPhail

Yes. Look, we're always evolving to better align our organization around our strategy. And these changes are part of what we do to evolve, they'll allow us to work smarter, move faster and innovate more quickly.

Isabel Janci

Christine, we have time for one more question.

Operator

Our final question comes from the line of Zach Fadem with Wells Fargo.

Zachary Fadem

So my first question is on cross-sell between SRS and GMS. You've talked about $400 million for the year. My first question is how you would expect that to build through the year? What did you see in Q2? What are the expectations in the second half of the year?

Richard McPhail

Well, that's the amount we expect through the year, but I think it's important. It's not just among SRS and GMS as Ann referenced, that's cross-sell, we expect across the entire system. And it actually -- I think you need to think about Pro starting in the store and us penetrating more deeply into the wallet of that in-store probe. And Ann, maybe you can.

Ann-Marie Campbell

No. I do think that's where we start because that's when majority of our sales come from our in-store Pro and we have to win with them every day. And so we've talked about this over the past few years that we have evolved some of the things we do in store, not only our staffing model, but we're providing tools and technology for product to really enable a more effective experience for associates and the Pro they serve. And we know our ability to grow the share with the Pros is by adding capabilities to win more of their complex purchases. And we're seeing traction with those pros who interact with these capabilities.

So it's not just about SRS or 1 component. It's about the entire ecosystem that really enables us to make a difference and helping drive momentum. And I think this is super important because Mike and team just continue to work on these capabilities and Mike, do you want to just add some of the things that you guys are doing.

Michael Rowe

Yes, sure. I mean, as Richard and Ann both point out, we continue to see very steady progress and success in our Pro business from the investments made in the Pro ecosystem Notably, we see advances made in our investments in order management and delivery capabilities. This is pretty evident by us achieving the highest levels of on-time and complete for flatbed and box truck deliveries along with the customer satisfaction scoring that we're seeing that we saw this past quarter. And these come as a result of the investments that Ann talked about in things like self-serve site instructions along with investments in capturing our Pros business hours of operations and continued advances in delivery tracking capabilities, which help around visibility and transparency. And on top of this, the investments in our B2B experience are resulting in outsized online growth with our Pros. And that includes the increasing use of our project planning tool, which helps us organize and stage deliveries for larger, more complex Pros. We're also seeing Pros build materialists and purchase more with the use of our AI-powered material list builder, and we continue to invest in search and our B2B experience along with improvements to the app, making it much more responsive and faster.

So these capabilities allow us to earn a greater wallet share with the Pro. And coming all the way back to some of the specifics of your question, Zach, and Ann talked about quotenter and the success that we've seen there. We've had success in the past, working with HD Supply and the purchase card that their customers use inside of our stores, and we've started to roll out the SRS purchase card as well to be able to use in our stores. And as you pointed out, with things like national production homebuilders, SRS itself leveraging GMS in terms of those relationships in the past. We've seen a lot of success with this year.

Richard McPhail

So just to thank you, Mike, and to wrap it up. Look, the teams across Pro have never worked more tightly together. We're seeing great momentum and we think we're building something unique in the marketplace that's never existed before, and our customers tell us it's resonating with them. And that's why we think we've seen the success we have so far this year.

Zachary Fadem

Really appreciate all the color. And just a quick follow-up because I don't want to belabor the gross margin question too much, but just to iron out the confusion bridging the gap from Q2 to the second half of the year. We know tariff refund, that benefit rolls off from Q1 to -- Q2 to Q3, that roughly 60 basis points of GMS mix pressure, that also rolls off. I just -- could we help understand whether the 60 basis points of fuel and freight is transitory versus something like a freight contract that would enter the base for a year or longer?

Richard McPhail

You're mostly talking about market or pressure incrementally, kind of across product input across fuel and energy, but just maybe to answer your question specifically, since we've had a couple of questions on it. The timing of the refunds again, created a timing benefit in gross margin that you're likely going to see offset to a degree in Q3, right? So the benefit was seen in Q2, we are able to use that economic benefit to offset costs and that offset is largely a Q2 and Q3 kind of dynamic. And then, again, just to repeat it, by Q4, we expect that we will see our gross margin to be relatively flat versus last year.

Operator

Ms. Janci, I'd like to turn the floor back over to you for closing comments.

Isabel Janci

Thank you, everyone, for joining us today. We look forward to speaking with you on our third quarter earnings call in November.

Operator

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.