With fiscal 2025 now in the books, earnings reports from Home Depot, Lowe’s, Ace Hardware, and other major suppliers offer a clear view of where the home improvement market stands heading into 2026.
If you skim the headlines, you’ll see familiar language:
“Cautious consumer.”
“Soft discretionary spending.”
“Flat guidance.”
“Pressure from the housing market.”
But when you look closer, the picture is more nuanced. The market is not collapsing. It is recalibrating. And for contractors, that distinction matters.
The Top Line Is Slower. The Bottom Line Is Still Working.
Both Home Depot and Lowe’s posted solid profitability in Q4, even as large discretionary projects remain under pressure. Comparable sales were modest. Big-ticket remodel categories are not roaring back.
Across earnings calls, leadership teams repeatedly emphasized Pro customer resilience and services performance. While DIY has cooled from pandemic highs, contractor spending remains a stabilizing force.
Mortgage rates may moderate but remain an obstacle. Housing turnover is historically low, and owners are hunkering down with low-rate mortgages. As this uncertainty persists, there just isn’t a flow of full scale remodels.
Mortgage rates remain elevated. Home turnover is historically low. When people are not moving, they are less likely to invest in full-scale renovations.
However, repair, maintenance, and demand for non-discretionary improvements continue to be bright spots for the foreseeable future.
Aging Homes Create Structural Demand
While earnings reports focus on short-term performance, the long-term driver of contractor demand hasn’t changed. The average home in the United States is now more than 41 years old.
Roofs fail. HVAC systems age out. Plumbing corrodes. Windows lose efficiency. Exterior finishes degrade. Showers leak. Flooring wears down.
Even if homeowners delay dream remodels, they cannot delay necessary work forever.
On top of that, roughly 73 percent of U.S. wealth is held by Americans over 55. That group owns a significant portion of the housing stock. Many are staying in place longer rather than selling.
That combination creates a clear dynamic:
Fewer big remodel splurges. More break-fix, replacement, and performance upgrades.
For contractors positioned in repair-driven categories or with the ability to capitalize on break-fix jobs, that represents a huge opportunity.
Big Box Retailers Are Doubling Down on Contractors
The most telling part of these earnings reports is the acquisition strategy reflected in recent years and continuing well into 2026.
Home Depot has moved aggressively into specialty Pro distribution through SRS Distribution and its acquisition of GMS. It also acquired International Designs Group, expanding into design-oriented and specialty surfaces.
Lowe’s responded with its acquisition of Artisan Design Group and Foundation Building Materials (FBM) for $8.8 billion. FBM alone operates more than 370 locations across North America, distributing drywall, framing, insulation, and related interior building products to professional contractors.
These acquisitions extend far beyond adding square footage to retail stores. They expand specialty distribution networks, deepen jobsite delivery capabilities, and strengthen trade credit and supply relationships built specifically around professional contractors.
The Home Depot: Stable Results, Strategic Expansion in Pro
Home Depot closed fiscal 2025 with steady results that reflect a market under pressure but not in decline. Comparable sales were modest, and leadership acknowledged continued softness in large discretionary remodeling projects due to sluggish activity in the housing market. Profitability remains strong, and the company increased its dividend, signaling long-term confidence.
What stands out most is not short-term sales movement but long-term positioning. Home Depot continues to expand aggressively into the professional contractor space through its acquisitions. These moves extend Home Depot’s reach beyond retail aisles into specialty materials, bulk distribution, and jobsite delivery infrastructure.
The message is clear: the Pro customer is central to future growth. Contractors remain a priority segment, even in a slower housing cycle.
Lowe’s: Cautious Outlook, Serious Commitment to Pros
Lowe’s reported fourth quarter results that reflect stabilization in a still-uncertain housing environment. While overall growth remains modest and guidance for 2026 is measured, the company highlighted continued momentum in professional customer categories and services. Like Home Depot, Lowe’s is navigating consumer hesitation around big-ticket remodels, but contractor engagement remains a relative bright spot.
Much like Home Depot, Lowe’s acquisitions are clearly building deeper supply chain and installation capabilities. These investments improve material availability, delivery options, and trade credit access for professionals.
For contractors, this signals that Lowe’s is serious about strengthening its position as a long-term Pro partner. Its in-store leads, as indicated by strong Q4 sales in Pro, are like a local home show every weekend.
Ace Hardware, Floor & Decor, and Building Suppliers: Resilient Repair Demand
Beyond the big two retailers, the broader supply ecosystem reinforces the same theme: new construction is slower, but repair and maintenance activity continues to support steady demand.
Ace Hardware reported positive performance, particularly benefiting from localized service and maintenance categories. Independent retailers often have closer ties to small contractors and benefit when homeowners tackle necessary upgrades rather than major remodels.
Floor & Decor showed modest growth while continuing to invest in Pro loyalty programs and expanded supply capabilities. Meanwhile, companies tied more closely to new construction, such as Builders FirstSource, reflected ongoing housing market softness in their results.
Roofing and exterior suppliers like Beacon Roofing Supply experienced mixed results, but repair-driven categories remain more stable than large new builds.
Taken together, the broader supplier landscape confirms that while housing turnover is slow, aging homes continue to generate ongoing work for contractors focused on break-and-fix, replacement, and mid-range upgrades.
What This Means for Contractors
This is not the type of market where you grow by simply waiting for demand to surge. It is the type of market where disciplined operators gain share.
Homeowners are selective. They are cost-aware. They are postponing optional projects. But when something breaks or becomes inefficient, they still call.
That means contractors should be thinking in three directions:
1. Focus on Necessary Work
Repair, replacement, and preventative maintenance should be central to your messaging. When appropriate, position system upgrades around reliability and long-term operating savings rather than lifestyle improvements.
If your marketing still leans heavily toward luxury remodel positioning, consider broadening your narrative. The homeowner mindset has shifted from “dream project” to “smart upgrade.”
2. Strengthen Retailer Relationships
Both Home Depot and Lowe’s are investing heavily in contractor programs. Trade credit, bulk purchasing, delivery networks, and loyalty incentives are expanding.
If you participate in Home Services programs or Pro accounts, this is the time to review:
- Your pricing alignment
- How you leverage retailer promotions
- Whether you are capturing every available Pro benefit
Retailers are competing for your business. Contractors who optimize those relationships will gain margin advantages.
3. Tighten Operational Efficiency
When revenue growth is modest, operational efficiency becomes the margin driver.
In a flatter market, tighter production management protects your margin by eliminating the friction that quietly erodes profitability.
Lost time between jobs, poor schedule communication, material misalignment, and avoidable callbacks may seem small on their own, but together they drain efficiency and shrink profit.
The contractors who grow in 2026 will likely not be the ones with the flashiest marketing.
They will be the ones who:
- Keep crews scheduled efficiently
- Communicate clearly with customers
- Minimize downtime
- Track jobs accurately from sale to completion
This is where production discipline separates stable companies from struggling ones.
The Bigger Picture: Stability Favors Operators
The market heading into 2026 is best described as steady but selective.
It rewards:
- Well-run businesses
- Clear value propositions
- Repair-focused positioning
- Strong Pro partnerships
- Operational control
It does not reward waste, inefficiency, or reactive management.
Retailers are building infrastructure around contractors. Supply chains are consolidating to serve Pros more effectively. Homeowners still need skilled trades to maintain aging properties.
The growth may not be explosive. But it is accessible. And in markets like this, steady execution compounds.
The Real Opportunities Ahead
If the last few earnings cycles tell us anything, it’s this: waiting for a surge in housing or a drop in interest rates is not a strategy.
Retailers are investing in professional supply chains. Homes continue to age. Homeowners are cautious, but they are still spending where it matters. The environment is steady, not explosive.
In markets like this, growth rarely comes from volume alone. It comes from execution.
The contractors who perform well in 2026 will likely be the ones who run efficient schedules, manage costs carefully, and protect margin on every job. They will focus on repair and replacement work that remains durable. They will build strong supplier relationships and stay disciplined about operations.
This is a steady market. And steady markets reward operators who know their numbers, control their workflow, and deliver consistently.
