Steady demand. Careful customers. Strong signs for Pros.
The Big Box retailers just released their Q3 2025 numbers, and while the economy still has its challenges, the home improvement sector showed more stability than many expected.
Contractors won’t find explosive growth in these reports, but you will find something just as important: a market that’s holding steady, showing pockets of real strength, and laying the groundwork for a healthier 2026.
Industry Takeaways at a Glance
- Demand is steady, driven by the age of housing stock and nondiscretionary repairs.
- Big-ticket remodels are still soft, but not falling apart and creating pent-up demand.
- Pros continue to outperform DIY, keeping the market moving.
- Independents and Ace Hardware show real momentum compared to last year.
- Big Box retailers are investing heavily in inventory, digital tools, and contractor support.
For contractors, this means the market is workable and, in some areas, improving. It also means efficiency matters more than ever.
Home Depot Q3 2025: A Stable Quarter With Strength in Pro
Home Depot reported a flat yet stable quarter, noting that year-over-year comparisons were affected by a quieter storm season. With fewer weather-driven repairs than last year, some natural lift disappeared from the numbers, even though core contractor demand remained steady.
Key Numbers
- Revenue: Essentially flat year over year.
- Transactions: Slightly down, but average ticket remained stable.
- Pro Business: Continues to outperform DIY.
- Outlook: Cautiously optimistic heading into 2026.
What This Means for Contractors
Home Depot’s stability tells us that contractors are still showing up and still spending. The work hasn’t disappeared, it has simply shifted toward repairs, replacements, and essential projects.
For contractors, this means:
- Business tied to nondiscretionary jobs (HVAC, roofing, water heaters, windows, flooring) will stay strong.
- Reliability matters more than flash. Homeowners want dependable results, not risky upgrades.
- Contractors connected to Home Depot’s Pro programs may find more support and steadier volume as HD continues investing in the segment.
Lowe’s Q3 2025: A Better Than Expected Quarter
Lowe’s reported a modest but meaningful improvement. Adjusted earnings were up, comparable sales nudged forward, and the company raised its total sales guidance.
Key Numbers
- Comparable Sales: Up 0.4 percent.
- Adjusted EPS: Up nearly six percent.
- Full-Year Sales Outlook: Revised upward.
- Impressive performance from Lowe’s Home Services business referencing double-digit growth.
What This Means for Contractors
Lowe’s is continuing to prioritize and focus on growth in the Pro and Home Services business, which represents opportunities for contractors.
Contractors working with Lowe’s may notice:
- Slight improvements in job flow.
- Better inventory availability as the company rebalances categories.
- Continued investment in Pro services, delivery, and jobsite support.
It’s not a breakout quarter, but it’s a step in the right direction.
Ace Hardware & Independent Retailers: The Unexpected Bright Spot
Ace Hardware posted a strong Q3 2025, reporting record revenues of $2.5 billion, up 5.5% year-over-year. The company also saw a 34.9% surge in digital revenue and same-store sales growth of 1.6% among its U.S. retailers.
Material cost inflation is still significant, and smaller retailers face scale challenges. But Ace’s strong performance is a clear indicator that the independent channel is actively supporting contractor workflows in ways the big boxes may not.
The strongest positive movement this quarter actually came from independent retailers.
According to the NHPA Independent Retailer Index, independents posted a notable recovery from the previous year:
- 57 percent of retailers saw sales growth.
- Transaction count rose roughly two percent.
- Average ticket increased more than two percent.
- Gross margins improved across the board.
- Inventory investment climbed nearly four percent.
Yet independents faced rising costs as well:
- Cost of goods rose 6.3 percent, the highest in two years.
Source: NHPA Independent Retailer Tracker Q3 2025 (Farnsworth Group)
What This Means for Contractors
Independent hardware and home improvement stores are betting on continued demand. Their inventory levels are a clear signal that they expect contractors to keep buying.
For contractors, the benefits include:
- More available stock.
- More personalized service.
- More flexibility around special orders or jobsite needs.
The challenge is rising material costs, which makes tight production control more important than ever.
Where the Market Is Strong
Even in a cautious spending environment, several segments continue to outperform:
- Roofing replacements
- HVAC replacements
- Water heater installs
- Plumbing and electrical repairs
- Windows and doors
- Flooring refreshes
These categories are driven by need, not interest rates. That should keep contractors busy until the pent up demand for discretionary projects releases a new wave of home improvement activity.
Where Caution Still Exists
- Larger, financed remodels are still being delayed.
- Homeowners remain sensitive to price fluctuations.
- Retailers are slowing discretionary categories.
- Cost of goods and labor remain elevated.
Yet none of these are collapse signals. They are simply signs of a market where efficiency and consistency matter more than ever.
What Contractors Should Focus on Now
1. Lean Into Essential Jobs
Put more emphasis on non discretionary work. These categories will carry the industry through to rate relief.
2. Build Stronger Retail Relationships
Retailers are investing in Pro support, logistics, and digital tools. Contractors who stay plugged in will benefit.
3. Improve Internal Efficiency
Margins tighten when:
- Schedules slip
- Communication breaks down
- Jobs drag on longer than they should
Production management matters here.
4. Prepare for Pent-Up Demand
If interest rates ease in 2026, contractors prepared to scale quickly will capture the first wave of larger projects. With minimal chance of recession, contractors should expect that non-discretionary spending will begin to flow.
How Production Management Helps Contractors Win in This Market
When the market is steady but not growing fast, the contractors who succeed are the ones who run more efficient operations. Production management helps you:
- Keep every job moving without constant check-ins.
- Track installers, crews, and subcontractors in real time.
- Eliminate missing paperwork, lost notes, and miscommunication.
- Reduce cycle times and avoid costly delays.
- Make better decisions with accurate data.
You don’t need more apps. You need a system that pulls everything together.
How Cilio Fits In
Cilio’s production management platform gives contractors and installed-product companies the structure they need to deliver work consistently and profitably.
With Cilio, you can:
- Integrate your existing systems instead of replacing them.
- Keep sales, operations, and crews aligned.
- Automate scheduling and communication.
- Track job progress and compliance in one place.
- Deliver on-time installs with fewer headaches and fewer surprises.
Even in a slow-growth market, tight production is the advantage that helps contractors outperform.
Ready to Simplify Your Production Process?
Cilio can help you keep jobs on track, improve communication, and run a tighter, more predictable operation.
Schedule a quick call or demo to see how Cilio’s production management platform can strengthen your business and help you get ahead.
