Home improvement giants Home Depot and Lowe's have reported a surge in profits slipping away as the housing market slows down amidst a weak economy. The two retail chains, often seen as bellwethers for consumer sentiment, are feeling the pinch of consumers cutting back on home renovations, repairs, and DIY projects.
"We believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand," said Home Depot CEO Ted Decker during an earnings call last week. He also noted that broader economic uncertainty, driven by living costs, layoffs, and job concerns, is holding back demand.
The two companies reported falling profits during the August-October fiscal quarter. Home Depot's net income declined by 1 percent year-over-year to $3.6 billion, while Lowe's profit fell nearly 5 percent to $1.62 billion. Despite this, revenue rose roughly 3 percent at both companies, with comparable sales growing 0.2 percent and 0.4 percent respectively.
The decline in profits is largely attributed to the sluggish housing market, which has led to fewer home sales and renovations. Mortgage rates have also held above 6 percent, making it less appealing for people to buy and sell homes. The number of homes changing hands between January and September was at its lowest level in a decade, with only 28 out of every 1,000 homes selling during this period.
The companies are now trimming their full-year profit forecasts, signaling a tougher economic backdrop. Home Depot expects earnings for 2025 to decline about 5 percent, while Lowe's has said its full-year earnings will likely land at the lower end of its previous guidance.
However, both companies remain optimistic on certain categories such as windows, doors, water heaters, and kitchen and bath businesses, which saw growth during the quarter. These trends have given them a cautiously optimistic outlook for brighter days ahead.
The decline in extreme weather events also impacted demand for roofing, power generation, and plywood, with shipments falling by "double digits" this year due to the absence of storms. However, physical factors alone don't explain the slowdown, with economic uncertainty driving consumer behavior.
Home Depot's stock fell nearly 1 percent today, while Lowe's shares rose 5 percent after Ellison cited strength in these categories as a sign of life in areas that make them cautiously optimistic about brighter days ahead.
"We believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand," said Home Depot CEO Ted Decker during an earnings call last week. He also noted that broader economic uncertainty, driven by living costs, layoffs, and job concerns, is holding back demand.
The two companies reported falling profits during the August-October fiscal quarter. Home Depot's net income declined by 1 percent year-over-year to $3.6 billion, while Lowe's profit fell nearly 5 percent to $1.62 billion. Despite this, revenue rose roughly 3 percent at both companies, with comparable sales growing 0.2 percent and 0.4 percent respectively.
The decline in profits is largely attributed to the sluggish housing market, which has led to fewer home sales and renovations. Mortgage rates have also held above 6 percent, making it less appealing for people to buy and sell homes. The number of homes changing hands between January and September was at its lowest level in a decade, with only 28 out of every 1,000 homes selling during this period.
The companies are now trimming their full-year profit forecasts, signaling a tougher economic backdrop. Home Depot expects earnings for 2025 to decline about 5 percent, while Lowe's has said its full-year earnings will likely land at the lower end of its previous guidance.
However, both companies remain optimistic on certain categories such as windows, doors, water heaters, and kitchen and bath businesses, which saw growth during the quarter. These trends have given them a cautiously optimistic outlook for brighter days ahead.
The decline in extreme weather events also impacted demand for roofing, power generation, and plywood, with shipments falling by "double digits" this year due to the absence of storms. However, physical factors alone don't explain the slowdown, with economic uncertainty driving consumer behavior.
Home Depot's stock fell nearly 1 percent today, while Lowe's shares rose 5 percent after Ellison cited strength in these categories as a sign of life in areas that make them cautiously optimistic about brighter days ahead.
so i'm thinking the housing market slowdown is having a ripple effect on home improvement retailers like Home Depot and Lowe's... it makes sense, right? people are less likely to splurge on renovations or repairs when they're uncertain about their finances or concerned about job security 
. but what's interesting is that both companies are still optimistic about certain categories - windows, doors, water heaters, etc. 
maybe these products are seen as more essential or value-driven, and people are sticking to them even in tough economic times?
. what i'm curious about is how this slowdown will play out over time - will consumers start to feel more confident again? or will they keep cutting back on discretionary spending?
. and in this case, it's clear that Home Depot and Lowe's are feeling the pinch... but there's still a glimmer of hope for these companies in areas like windows and doors 
. And with mortgage rates so high, it's no wonder people are putting off buying or selling homes altogether 
.
. It's like we're all just waiting to see what happens next before making any big purchases or decisions 
.
. It makes sense with the housing market slowing down and people being cautious with their finances, but I still feel for these companies - they've been around for ages! 
Their full-year profit forecasts getting trimmed? That's not what you want to hear when you're trying to build a business empire 
. On the bright side, those window, door, and water heater sales were up... that's something at least 
. Guess we'll just have to wait and see how things shake out in 2025 
home improvement sites are getting less traffic and sales, but the ones making windows and water heaters are doing alright? maybe ppl just wanna stay indoors with new doors instead of dealing with mortgage stress 
low interest rates would help tho...