Home Depot and Walmart Show Divergent Margins in Latest Fiscal Reports

Home Depot reported fiscal year revenue of $164.7 billion for the period ended February 2026, marking a 3.2% year-over-year increase. The company recorded net income of $14.2 billion, resulting in a net margin of 8.6%, down from 9.3% in the prior year. These figures reflect the company's focus on specialized home improvement products for DIY homeowners and professional contractors, supported by acquisitions in the pro segment.

Walmart reported fiscal year revenue of $713.2 billion for the period ended January 2026, up 4.7% from the previous year. Net income reached $21.9 billion, yielding a net margin of 3.1%, an improvement from 2.9% in the prior fiscal year. The retailer serves approximately 280 million customers weekly through its integrated physical and digital network, spanning the United States, international markets, and Sam's Club.

Balance Sheet Structures Differ Significantly

Home Depot carries a debt-to-equity ratio of approximately 5.1x, indicating total debt is about five times shareholder equity. Its current ratio stands at 1.1x, and free cash flow reached $12.6 billion. Walmart maintains a lower debt-to-equity ratio of 0.7x, with total debt below shareholder equity. The company's current ratio is 0.8x, and it generated $14.9 billion in free cash flow.

Valuation Metrics Reflect Different Market Expectations

Walmart trades at a forward P/E of 36.7x, compared to Home Depot's 20.6x. However, Home Depot carries a price-to-sales ratio of 1.9x, higher than Walmart's 1.2x. According to GN auto stocks/consumer: consumer stocks, these valuations reflect differing market expectations for growth and profitability. Walmart's higher multiple suggests investors anticipate stronger future earnings growth relative to current sales, while Home Depot's higher P/S ratio indicates a premium on its revenue base.

Operational Risks Vary by Business Model

Home Depot faces sensitivity to housing market fluctuations and interest rate changes, which directly impact renovation demand. The company also faces legal scrutiny over AI-powered surveillance tools and competitive pressure from online retailers. Walmart navigates trade barriers, tariffs, and currency fluctuations due to its global operations. It also faces legal risks related to pharmacy practices and consumer protection lawsuits, requiring continuous innovation to maintain price leadership.