A：The impact of Ted's temporary medical leave of absence is minimal as the company has an exceptional leadership team and a dedicated board to support the ongoing operations and strategy execution.

A：During the quarter, the company observed broad-based demand across the business in the US, with positive comp sales in the Northern and Western divisions, and positive comps in Mexico and Canada. Consumer uncertainty and housing affordability continue to pressure demand for larger home improvement projects.

A：The company is enhancing the customer experience by investing in frictionless interconnection, introducing new and innovative products, deploying technology across stores, and improving associate experience with technology tools. This has led to greater associate engagement, better customer satisfaction scores, and stronger sales.

A：Successful delivery initiatives include same-day or next-day delivery for over 65% of in-stock products, the launch of express delivery nationwide with delivery on tens of thousands of products in three hours or less, and the evolution of the delivery model to stock a select assortment of appliances for next-day delivery in certain markets.

A：The company is winning with professional customers, as indicated by the positive comp and strong performance across all pro cohorts. This is the result of investments in systems, capabilities, product assortments, job site quantities, tools, and specialized services for pros.

A：Based on the company's first half performance, 100% of store-eligible associates qualified for success sharing and profit sharing programs, highlighting the positive impact of associates on customer service and business results.

A：Merchandising categories that experienced positive comps include storage, electrical hardware, power plumbing, indoor garden, kitchen, paint, bath, outdoor garden, building materials, flooring, and millwork.

A：The company's online sales have been leveraged by digital platforms, resulting in double-digit year-over-year growth for the fifth consecutive quarter. This growth is attributed to ongoing investments across interconnected platforms.

A：The company has made meaningful progress in delivery speeds, reducing delivery lead times approximately 45% in the US over the last 18 months. Now, approximately three-quarters of big and bulky deliveries are made within 20 days. The company will continue to optimize fulfillment across all assets to enhance the interconnected shopping experience.

A：During the second quarter, growth was seen in portable power tools, with record sales, and in storage with the success of the waskey pack, the company's largest national loyalty brand for Pros. The waskey pack is described as the industry's most versatile and durable modular storage system.

A：The Home Depot is expanding its relationship with USG across the business, with The Home Depot being the exclusive launch partner for USG's newest innovation, ultralight Tuff Wall panels in the Big Box retail channel.

A：The merchandizing organization's focus for the third quarter is to continue being the customers' advocate for value, which includes providing a broad assortment of best-in-class products that are in stock and available when needed.

A：During the second quarter, The Home Depot opened 15 new stores, bringing the total store count to 2364. Capital expenditures for the second quarter were approximately $880 million.

A：The company is reaffirming its fiscal 2026 guidance, expecting to grow market share with comp sales ranging between flat to 1% growth. They expect mid single-digit percent organic sales growth. They plan to open approximately 15 new stores and 40 to 50 new SRS branches. The gross margin is expected to be approximately 33.1%, with an operating margin of about 12.4% to 12.6% and an adjusted operating margin of approximately 12.8% to 13%. The effective tax rate is targeted at approximately 24.3%, with net interest expense of approximately $2.3 billion. The diluted earnings per share and adjusted diluted earnings per share are expected to increase approximately flat to 1% compared to fiscal 2025. The company plans to invest approximately 2.5% of sales in capital expenditures for fiscal 2026.

A：The $685 million tariff refund reduced the cost of goods sold (COGS) by approximately 140 basis points, impacting the gross margin. This was offset by increased costs in the company's base of about 60 basis points, resulting in a net benefit of tariffs of around 80 to 85 basis points in the P&L.

A：The remaining $45 million of the tariff refund, which is in inventory, will impact the P&L as inventory is turned over through the remainder of the year.

A：The acquisition of GMS and Mingle DF had a mix impact on the gross margin of about -100 basis points.

A：The changes in tariffs, including the expired Section 101 and the updated Section 301, have resulted in incremental cost pressures for the company.

A：The company plans to fully offset the cost pressures from incremental fuel costs and changes in tariffs by the received tariff refunds. They have reaffirmed their guidance for the year, and while there may be some quarterly lapping effects, there should be no annual lap in 2027.

A：The company has observed historically low housing turnover rates for four years, which have not shown any signs of increasing. They expect the increase in rates to impact their performance eventually, but there is no visible inflection point yet.

A：The company had a strong international performance with Canada and Mexico both achieving fantastic results, with positive comp performance. Internally, the SRS acquisition had positive comps across all verticals and appears to be taking significant share, contributing positively to the company's overall performance.

A：The company's full-year comp guidance implies a wide range of scenarios. For the back half of the year, the midpoint of the comp growth rate is expected to be similar to the first half but below the Q2 trend due to easier comparison. The company is considering various scenarios and building blocks to understand the full-year comp performance.

A：The teams have exceeded expectations in the current quarter with a start consistent with the high demand seen in the second quarter. However, the market conditions include significant unplanned cost pressures and volatility.

A：The company believes the range they have set is appropriate and as the year progresses, the likelihood of the extremes of this range becomes less likely. Their focus is on controlling what they can control.

A：There is evidence of consumer re-engagement through app downloads, increased quotes through the mobile app, and more usage of the Magic Apron, which provides confidence that the bottom has been reached in home improvement demand and indicates market share gains. The company has taken market share in a difficult environment and is confident in its investments' positioning.

A：Customers have positively responded to the company's initiatives, and the products offered are what customers want, leading to record levels of satisfaction. This is important for driving customer service and operational reliability, especially as stores play a crucial role in the delivery and fulfillment of the interconnected customer experience.

A：Despite market pressures, the company's strong performance is attributable to meeting customers where they are, focusing on large and small projects, and the exceptional work of store associates and supply chain associates. The company is thrilled with the performance and the work being done by their teams.

A：The partnership with Jordan has been an important enabler, contributing to growth in traffic and conversion rates, and the successful operation of the Magic Apron.

A：Magic Apron has seen an increase in traffic and conversion, with the app being the highest growth surface among digital platforms. The team has announced a more localized version of Magic Apron that understands the customer's store location, in addition to the existing features.

A：The company has announced a nationwide rollout of an express delivery service on homedepot.com, where customers can pay a small flat fee to get deliveries within three hours, with most deliveries happening in less than one hour.

A：Gross margin pressure in the second quarter, when tariffs are excluded, was due to increased costs. However, the company was able to offset these costs with tariff-free funds. The 120 basis point pressure included 60 basis points from increased costs offset by tariff-free funds and another 60 basis points from the mix impact of GMS and MING, which had an acquisition-related impact.

A：The same SKU inflation during the quarter was influenced by a variety of factors, including refrigeration, portable power patio, and larger ticket items. Additionally, single purchase items that were not financed contributed to this inflation. There was also a category mix with people trading up within categories, and sales were driven by items exceeding $2500 in value.

A：If the current ticket performance were to continue for the remainder of the year, and traffic improved slightly, the company would likely be at the higher end, possibly above the highest end of expectations. This scenario would be a significant shift from the volatility noted earlier and would require an analysis of how this would affect financial outcomes.

A：Weather impacted the business performance in the first half of the year with two small events significantly affecting numbers. In 2025, a week of significant heat at the end of June affected the period's numbers, while in 2026, the July comp shift benefited from the absence of such an event in the previous year. Weather also impacted May, but when adjusted, May's performance was consistent with June and July. In the back half of 2025, the least amount of storm activity in many years affected Srs, which is pressured by this lack of activity. The numbers suggest that, despite the challenges from weather, the underlying performance had some positive adjustments.

A：SRS is expected to deliver mid single-digit organic growth for the year. The performance in the back half of 2025 was influenced by the lack of storm activity, which has traditionally supported SRS. The company remains optimistic about SRS's mid single-digit organic growth outlook for the year. The positive performance is also attributed to the capabilities enabled by the acquisition of SRS and GMS, which has allowed for increased sales through the Pro marketplace and has positively impacted the store teams.

A：The integration of SRS and GMS has significantly impacted the company's ability to close sales and serve customers at a higher level. It has allowed the stores to leverage a broader product catalog, including items from SRS and GMS, to provide a more comprehensive offering to customers. This integration has resulted in rapid growth of sales through the Pro marketplace facilitated by SRS, with 90% of stores participating within the last 12 months. The expanded catalog has been well received by homebuilders, commercial customers, and remodelers, contributing to increased sales across various verticals.

A：The company has reaffirmed its guidance, indicating a clean starting point from the end of the year with respect to Q2 expenses. Although expenses are anticipated to be lumpy throughout the year due to certain campaigns, the company is accustomed to managing in various cost environments. The focus remains on ensuring that the company's financial position remains solid as it builds on its current guidance, and if oil and energy prices stay at current levels, the company is confident it can manage effectively, potentially through pricing or efficiencies.

A：The company feels confident in its ability to manage inflationary and deflationary environments and is focused on enhancing customer experience and continuing to develop its capabilities.

A：The company has factored in the expectation of lapping some tariffs and price increases from last year, as well as continued cost headwinds, into their guidance for the back half of the year, and they do not anticipate any changes from what they have already communicated.

A：The recent organizational changes were made to better align the company's organization around its strategy, to allow the company to work more, move faster, and innovate more quickly.

A：The company expects cross-selling activities across the entire system, including SRS and GMS, to continue increasing in the second half of the year, as part of their strategy to win with their customers daily.

A：The company has made very steady progress and success in their business from investments in the pro ecosystem, particularly in order management and delivery capabilities. This has resulted in the highest levels of on-time and complete deliveries and improved customer satisfaction.

A：The company's B2B experience has contributed to outsized online growth with pros, including the increasing use of their project planning tool, which helps with organized deliveries for larger, more complex pros. This also includes the use of Pro’s Choice purchase card in stores and the strengthening of relationships with national production and home builders.

A：The company has had success in the past working with HD supply and has started to roll out the SRS purchase card to be used in stores. These developments help leverage relationships and improve the business's interactions with customers.

A：The company views the collaboration across Pro as unique and impactful, with great momentum in the marketplace. They believe they are building something unprecedented that resonates with customers, which is reflected in the customer feedback and the success experienced so far this year.

A：The company expects the gross margin to be relatively flat compared to last year. They anticipate a relatively flat gross margin, offset to some degree by timing benefits in Q3, with the full benefit already recognized in Q2.