Richard McPhail, chief financial officer at Home Depot, has reaffirmed the retailer’s sales guidance in light of multiple rising costs, including fuel prices, interest rates and tariffs.
Home Depot expects comparable sales growth to be in a range from flat to 2% growth. That follows a quarter in which Home Depot comparable sales increased 0.6% overall. In the U.S., specifically, they grew 0.4%.
Total Home Depot sales reached about $47.77 billion in its fiscal Q1. That was a 4.8% increase year over year from about $39.86 billion, about half the growth rate of Home Depot ecommerce in Q1.
“The environment is different than it was three months ago, probably a more volatile external environment to a degree,” McPhail said on Home Depot’s Q1 earnings call with analysts. “But really kind of unclear on how that will all shape out for the year.”
The Home Depot is No. 4 in the Top 2000 Database. The database ranks North America’s largest online retailers by their annual ecommerce sales and more. Additionally, Home Depot is the top-ranked retailer in the Top 2000’s Hardware & Home Improvement category.
How fuel costs are impacting Home Depot
The rise in energy prices throughout March, April and May followed the onset of the U.S. and Israel’s war against Iran, which began at the end of February 2026. The military conflict has disrupted transit through the Strait of Hormuz. The strait runs between Iran and Oman, and about a fifth of the world’s oil normally flows through it.
As of May 19, the price of a barrel of crude oil hovered around $104. It reached about $112 on April 7. For comparison, it was about $65 when Home Depot’s Q1 began, according to historical data from Trading Economics.
“Obviously, as we stand today, we could say we could see potential cost pressures building in the form of fuel prices and other commodity input costs, new tariffs have been introduced,” McPhail said. “But the environment is changing almost every day.”
McPhail said Home Depot sees increased fuel costs hitting the retailer directly. It has “a considerable amount of transportation expense” in its books, he noted.
McPhail said there are “a number of potential factors at play.”
“If you look across history and you look at significant fuel price increases and their impact on demand, it’s hard to parse out fuel increases from a general degree of pressure on consumer spending,” McPhail said. “It also has to be taken in the context of the interest-rate environment, which we are more highly sensitive to.”
Effect of high interest rates
CEO Ed Decker said Home Depot’s core customer is “probably amongst the healthiest” of all its customers.
Those customers tend to own their homes, he said. And although they might be less engaged in larger projects, they “engaged across more departments in Q1,” according to Decker.
Factoring in higher interest rates, he said he anticipates housing turnover remaining low.
And if interest rates are “higher for longer” in a slow housing market, he added, Home Depot will “have to keep working our way through this period of moderation, keep focusing on controlling what we can control and take share in the marketplace.”
How Home Depot is approaching changing tariff policies
William Bastek, executive vice president of merchandising, noted it has been more than a year since key tariff policy changes in 2025.
There are still cost implications tied to tariffs, he said.
“But certainly, from a year-over-year standpoint, there’s obviously less pressure than we saw certainly a year ago,” Bastek said.
Additionally, McPhail said Home Depot has filed for tariff refunds.
“And while we don’t disclose the amount and while we have received an immaterial amount to date, we have assumed that that could provide a significant offset to those costs,” McPhail said.
He said Home Depot will continue to manage cost and price, as it did when the U.S. government introduced tariff changes in early 2025.
McPhail also noted that Home Depot has its “largest selling weeks still ahead of us.” Its fiscal Q2 is typically the quarter in which Home Depot sees its highest sales of the year. In Home Depot’s Q2 2025, total sales topped $45 billion for the first and only time in a single quarter to date.
“So it’s very hard to understand exactly how all of this will balance out through the year, and we’ll continue to watch it and manage through it,” McPhail said.
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