Home improvement retailers Home Depot (NYSE: HD) and Lowe’s Companies, Inc. (NYSE: LOW) have been facing a challenging operating environment for a while now. The companies have been battling macroeconomic headwinds and housing market pressures that have impacted home improvement demand. The downside is these challenges are anticipated to continue in the near term, which has led to a muted outlook.
Slow demand
Demand for home improvement continues to be weighed down by a difficult economic environment and housing market headwinds. Inflationary pressures and interest rates continue to impact the housing market, and while difficulties in acquiring new homes are likely to push customers to renovate their existing homes, they have remained reluctant to take on large discretionary projects, opting instead for smaller and unavoidable tasks.
Both Home Depot and Lowe’s have been seeing softness in larger discretionary projects compared to smaller and seasonal projects. While Home Depot’s big ticket comp transactions were positive 2.3% in the third quarter of 2025, this was mainly driven by its Pro customer segment.
