Home Depot’s Canadian business gained momentum in the second quarter, with the home improvement retailer reporting positive comparable sales in Canada and saying the market outperformed the company overall.
The improvement comes as Canada’s housing market remains subdued and affordability pressures continue to weigh on larger renovation projects. Home Depot management said the Canadian business accelerated during the quarter, with positive comparable transactions and unit growth through the first half of the year.
The performance marks an improvement from earlier in the year, when Home Depot reported negative comparable sales in Canada during the first quarter. By Q2, Canada had moved back into positive territory and was among the stronger-performing parts of the company’s international business.
“Both Canada and Mexico out-comped the company,” Ann-Marie Campbell, Senior Executive Vice President at Home Depot, said during the company’s second-quarter earnings call. She added that it was “great to see the acceleration in Canada,” highlighting positive comparable transactions and units during the first half.
The transaction performance is notable because Home Depot’s company-wide growth was partly driven by customers spending more per purchase. Across the company, comparable average ticket increased 2.8% during the quarter while comparable transactions declined 1%. Transactions valued at more than US$1,000 increased 2.4%.
Home Depot did not disclose a specific comparable-sales figure for Canada. Company-wide comparable sales increased 1.7% during the quarter, compared with 1.3% growth in the U.S. Foreign exchange provided approximately 25 basis points of benefit to the difference between the two figures, while management also pointed to strong performance in Canada, Mexico and its SRS distribution business.
Smaller Home Improvement Projects Remain Active
Home Depot said customers continued to spend on home improvement during the quarter, although larger discretionary projects remain under pressure.
Customers were particularly active in smaller repair and maintenance projects, while 13 of the company’s 16 merchandising departments recorded positive comparable sales. Those included electrical, hardware, plumbing, power, storage, kitchen, paint, building materials, flooring and millwork.
Billy Bastek, Executive Vice President of Merchandising at Home Depot, said the strength extended well beyond seasonal merchandise. Only three of the company’s 20 strongest-performing businesses during the quarter were seasonal, with strong results coming from core areas such as electrical, plumbing, hardware and tools.
Professional customers also outperformed do-it-yourself shoppers. Home Depot reported strength among Pro customers in portable power tools, decking, dimensional lumber, pipe and fittings, fasteners, hand tools and concrete, while DIY customers performed well across a number of spring-related categories, including live goods, mulch, soil, patio and grills.
The spending pattern points to continued demand for maintenance, necessary home projects and professional work even as consumers remain cautious about larger discretionary renovations.
Canadian Housing Market Remains Restrained
The improvement at Home Depot Canada is occurring against a housing market that has recently shown some sequential improvement but remains subdued compared with a year ago.
Canadian home sales increased 0.5% between June and July, according to the Canadian Real Estate Association, marking a fourth consecutive monthly increase. Actual sales activity in July, however, remained 5.3% below July 2025, while the national MLS Home Price Index was down 3.3% year-over-year.
CREA currently forecasts approximately 463,336 residential properties will change hands through Canadian MLS systems in 2026, representing a 1.4% decline from 2025.
Housing turnover is closely watched by the home improvement industry because purchases and moves can generate spending on renovations, repairs, appliances, flooring, paint and other home-related categories. Home Depot CFO Richard McPhail said housing turnover has remained at historically low levels for several years.
“We have seen housing turnover at these low levels for four years now,” McPhail said. “There is just no sign of an inflection point at this moment.”
Home Depot believes its broader business is gaining market share despite that environment. McPhail said significant pressure remains across the home improvement sector and businesses connected with housing, while investments in stores, product availability, digital capabilities and customer service are helping the retailer compete for available demand.
The company did not make a Canada-specific market-share claim, but the acceleration of its Canadian operations stands out against the subdued housing backdrop. Positive Canadian transactions and units also indicate that the improvement extends beyond higher average prices or larger baskets.
Pro Customers Remain a Growth Priority
Professional customers remain central to Home Depot’s strategy as the retailer builds its business with contractors, builders and other trades.
Home Depot has invested in product assortments, job-lot quantities, specialized sales teams, technology and delivery capabilities intended to support larger and more complex professional purchases. Pro customers posted positive comparable sales during the second quarter and outperformed DIY customers.
Campbell said the majority of Home Depot’s Pro sales continue to originate with customers using its stores, keeping the physical retail network at the centre of the strategy. The company has added technology and capabilities at its Pro desks as it works to capture a greater share of customers’ project spending.
Digital sales are growing alongside the store business. Comparable sales generated through Home Depot’s digital platforms increased 11% year-over-year during the second quarter, marking the fifth consecutive quarter of double-digit online growth.
The strategy increasingly connects Home Depot’s stores and digital operations, with the physical network supporting product availability, customer service and fulfillment while online tools help customers plan projects and make purchases.
Home Depot’s Canadian Footprint
Home Depot Canada currently lists 182 stores across all 10 provinces, supported by more than 35,000 associates and a national supply chain and distribution network.
The retailer announced plans in 2025 for an approximately 80,000-square-foot store in Fort McMurray, Alberta, which was intended to become its 183rd Canadian location and 28th store in the province.
Home Depot Maintains 2026 Outlook
Across the company, Home Depot generated second-quarter sales of US$47.9 billion, an increase of 5.7% from a year earlier. Adjusted diluted earnings per share increased 5.1% to US$4.92, while the retailer ended the quarter with 2,364 stores across its operations.
Home Depot maintained its fiscal 2026 outlook following the stronger-than-expected quarter. The company continues to expect comparable sales ranging from flat to 2% growth and total sales growth of approximately 2.5% to 4.5%. Diluted and adjusted diluted earnings per share are expected to range from approximately flat to 4% growth compared with fiscal 2025.
Management said demand at the beginning of the third quarter has remained consistent with what Home Depot experienced in Q2, although the company continues to exercise caution amid cost pressures and what McPhail described as “frozen housing conditions.”
Home Depot Canada enters the second half with considerably stronger momentum than it showed earlier in the year. The business moved from negative comparable sales in Q1 to outperforming the broader company in Q2, while positive transactions and unit growth indicate that Canadian customers remain engaged in home improvement despite a housing market that has yet to return to stronger levels.
