Net earnings rose to $1.8 billion, or $1.24 a share in the second quarter ended Aug. 4 from $1.53 billion, or $1.01 a share, a year earlier.
Analysts on average were expecting a profit of $1.21 a share, according to Thomson Reuters.
Sales rose 9.5 percent to $22.5 billion, topping the analysts' average estimate of $21.8 billion.
Comparable store sales for the second quarter were up 10.7 percent, and comp sales for U.S. stores were up 11.4 percent. Nagel said he's focusing on these same store sales numbers because they're "very much a positive surprise" on the upside.
Home Depot also raised its full-year guidance to $3.60 a share from its previous estimate of $3.52 a share. That compared with analysts' expectations of $3.64 a share. The company also raised its full-year global same-store sales guidance to up 6 percent from up 4 percent.
Home Depot shares were higher in premarket trading following the results. (Click here to get the latest quotes.)
"I still view Home Depot shares as inexpensive," Nagel said. "I think if we're having this conversation two years from now, we're going to be talking about a much higher level of earnings for Home Depot as they continue to recover."
Rival Lowe's is set to report earnings before the opening bell on Wednesday. Analysts will be looking for an update on Lowe's plans to expand in California by buying Sears spinoff Orchard Supply Hardware Stores for about $205 million.
—By CNBC's Matthew J. Belvedere. Follow him on Twitter
@Matt_SquawkCNBC. Wires contributed to this report.