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Home improvement giants Home Depot and Lowe’s have had some serious wrenches thrown in their businesses lately, from tariffs to ICE raids to high interest rates. But their latest earnings calls highlighted their blueprint to rebuild: wooing the pros.
In a shockingly upbeat earnings call, Lowe’s announced it’s buying drywall and insulation distributor Foundation Building Materials for $8.8 billion, a nice complement to its purchase of interior design and installation provider Artisan Design Group for $1.3 billion earlier this year. Meanwhile, store revenue met expectations at $23.96 billion, and earnings per share surpassed predictions at $4.33, leading to a 0.29% bump in the stock today.
On the other side of the aisle, Home Depot has shored up its pro business by recently snapping up two companies: building products distributor GMS for $4.3 billion, and roofing, landscaping, and pool materials provider SRS for over $18 billion. While blockbuster deals are fun and all, the company’s Q2 earnings fell short of Wall Street’s hopes. Its stock dropped 1.32% today as it became clear to all that Lowe’s has stepped into the ring swinging.
Lowe’s vs. Home Depot
These megastores’ shift toward professionals arrives at a time when the amateur DIY market has been weakening like particleboard under pressure.
Both companies said that high interest rates have pushed retail customers to put off bigger-ticket purchases, while professional buying remains steady. Tariff-induced price hikes are another concern—although not much of one, since over half of Home Depot’s suppliers and 60% of Lowe’s are based in the US.
Despite the strong earnings, Lowe’s still has some catching up to do: 70% of its revenue came from DIY customers and only 30% from pros in fiscal 2024. Home Depot, on the other hand, enjoys a 50/50 split.
So, which chain has the upper hand? “Home Depot has always seemed to have the heavier hammer,” noted Running Point Capital Advisors Chief Investment Officer Michael Ashley Schulman. “It also has the earlier start, the broader pro ecosystem, and a larger fleet and branch footprint via SRS and soon GMS. Their latest quarter showed steady same-store gains despite big ticket hesitation, which suggests its pro engine is carrying more of the load while consumers wait on rate relief.”
That said, Schulman noted that it’s too soon to declare a winner. “The clock says Home Depot started earlier. The scoreboard says both can win.”—JD