The latest earnings reports from Lowe’s and Home Depot provide some of the most positive news in recent years for contractors and the home improvement industry. For the first time in 2.5 years, both companies posted positive comparable sales, signaling strength in the Pro market and continued demand for home improvement projects.
While large discretionary remodels are still facing some pressure, the outlook remains optimistic for the second half of 2025 and beyond. Here’s what you need to know about the latest reports and how they impact you.
Positive Growth for Pros & Key Sales Drivers
Both Home Depot and Lowe’s posted positive comps. This is a major milestone after over two years of declines. Although the rebuilding efforts after recent hurricanes and holiday season both drove revenue, Pro sales also remained strong. This reinforces that the “Do It For Me” market is healthy.
Non-discretionary sales (appliances, water heaters, HVAC, repairs) continue to outperform major remodels. However, for contractors, the positive Pro sales trend is great news. It shows that homeowners are still investing in improvements, particularly for essential and mid-sized projects. NOW is the time to lean-in and capitalize on these non-discretionary categories.
Both companies still see continued pressure on high ticket discretionary purchases, but they both anticipate the second half of 2025 will be stronger. This prediction is consistent with the projected growth Todd Tomalak (Zonda) explained in our most recent webinar, “Home Improvement 2025: Challenges, Opportunities, and Solutions”.
This points to the need to prepare for increased job count and customer demands for fast home improvements. The days of customers accepting long cycle times is over. Home installation companies should leverage systems to be more efficient and manage capacity.
Home Depot’s Perspective: Slow but Stable Growth
Home Depot CEO Ted Decker acknowledged that large-scale remodeling projects are still under pressure due to economic uncertainty and high interest rates. However, he emphasized that the consumer remains healthy.
Sales for the fourth quarter of 2024 were $39.7 Billion (up +14.1%) from the fourth quarter of 2023. In Q4 2024, comparable sales rose 0.8%, marking the first increase after eight consecutive quarters of declines. In the U.S., sales performed even better, climbing 1.3%.
Big-ticket purchases over $1,000 were up 0.9% compared to the fourth quarter of 2023, showing stabilization in spending. The outlook for 2025 is cautious but improving, with expectations for sales growth to outpace comps later in the year.
What This Means for Contractors
While full-home remodels might take longer to bounce back, essential repairs and mid-range projects are keeping demand steady. If interest rates ease, the second half of 2025 could see a surge in larger-scale renovations.
Lowe’s Perspective: The Future Looks Strong
Lowe’s reported very strong appliance sales and maintained an optimistic outlook for residential home improvement despite near-term challenges. Lowe’s posted $1.125 billion in net earnings for the quarter ending January 31, 2025, reflecting a 10.3% increase from $1.020 billion in the same period last year.
Their earnings call reinforced several long-term drivers of home improvement demand, including:
- Home values & home equity remain at all-time highs, giving homeowners the financial resources to invest in improvements.
- The U.S. housing stock is aging – now averaging over 41 years old – leading to both essential and discretionary upgrades.
- Homeowners are expected to tap into record levels of equity to fund renovations when interest rates stabilize.
- Millennials forming households, baby boomers aging in place, and remote work trends are all long-term tailwinds for the home improvement industry.
Installation Services remains a core pillar of Lowe’s “Total Home Strategy”, further proving that professional contractors will continue to play a crucial role in their success.
What This Means for Contractors
The long-term demand for home improvement remains strong, and Lowe’s is actively investing in the Pro market and installation services to meet that demand.
The Labor Shortage: A Growing Concern for Contractors
Even as demand stabilizes and growth returns, one challenge remains: residential labor shortages. The aging housing stock means essential repairs (water heaters, bathroom renovations, HVAC replacements) will continue to rise. Even with a flat first half of 2025, contractors need to be preparing for future labor needs now.
If you’re not already planning for growth, now is the time to think about hiring, training, and workforce development. The demand is coming. Contractors who invest in their teams will be best positioned to capitalize on the coming surge in home improvement projects.
To learn more about how you can adjust to labor shortages, read our blog, Labor Shortages in the Home Improvement Industry: What to Expect and What You Can Do About It.
2025 Is a Year to Prepare
The key message from Lowe’s and Home Depot is that home improvement spending isn’t going away. It’s just shifting. Essential repairs and Pro-driven sales are holding strong. Homeowners still have the financial resources (equity) to invest in their homes. The second half of 2025 could see stronger growth as conditions improve.
Now is the time to refine your business, optimize workflows, and position yourself for growth to take advantage of increased demand when it happens. When the next wave of home improvement spending hits, contractors who are ready will win big.
Want to learn how you can get ahead?
Schedule a demo with Cilio and learn how you can work smarter, not harder to modernize your home installation operations and harness growth as it happens.
