Americans are increasingly prioritizing smaller home repairs and maintenance over major renovations, a trend reflected in recent earnings reports from home improvement giants Lowe's and Home Depot. While both retailers reported increased sales, a closer look reveals a significant shift in consumer spending habits.
Home Depot reported a 5.7 percent increase in second-quarter sales, reaching nearly $48 billion, and maintained its full-year outlook. However, the company noted that while average transactions increased by 2.8 percent, the overall number of transactions decreased by 1 percent. This indicates that customers are becoming more selective, choosing smaller projects like painting and gardening over costly remodels.
Lowe's, on the other hand, issued a more cautious forecast. The company reported a modest 0.2 percent increase in comparable sales for the second quarter, despite overall sales rising to nearly $26 billion. Lowe's has since downgraded its full-year sales forecast and expects comparable sales to remain flat, a shift from its previous projection of slight growth. This cautious tone, according to Lowe's CEO Marvin Ellison, stems from homeowners remaining on the sidelines and delaying larger financial commitments.
This shift in spending is occurring in a housing market characterized by high mortgage rates and elevated home prices, which has made it difficult for both buyers and sellers to make a move. For existing homeowners, the decision to stay put often leads to prioritizing maintenance and smaller upgrades rather than embarking on expensive renovations.
Lowe's reported that its professional business and home-services operations showed strength, and online sales jumped by 15.7 percent, helping to offset the slowdown in do-it-yourself projects. This suggests consumers are still spending on their homes, but redirecting funds toward more manageable and less costly improvements. Tariffs also played a role in the financial reports, with both Lowe's and Home Depot receiving significant tariff refunds that helped cushion rising costs and impact earnings.
Looking ahead, Lowe's anticipates a gradual recovery in the housing market, while Home Depot continues to view the aging U.S. housing stock as a long-term driver of remodeling demand.