• by Sarah Mahoney , Staff Writer @mahoney_sarah, February 26, 2025

After two years of restrained spending, homeowners are finally opening their wallets for DIY projects again -- albeit for smaller upgrades -- helping Home Depot and Lowe’s post better-than-expected earnings this quarter.

At Home Depot, comparable sales for the fiscal fourth quarter of fiscal 2024 increased 0.8%, and comparable sales in the U.S. increased 1.3%. Total sales climbed 14.1% to $39.7 billion, buoyed by the acquisition of SRS Distribution, the roofing and building supplies company acquired last year.

Net earnings rose to $3 billion, up 7% from $2.8 billion in the comparable period a year ago.

Those numbers beat expectations and marked the first positive change in comparable sales since the second quarter of 2021. Observers were especially encouraged by consumers’ willingness to roll up their sleeves for smaller projects. At the same time, larger-scale efforts -- the kitchen and bathroom remodels that typically require financing -- are still under pressure.

“We look positively on the results that show building broad-based consumer engagement in home improvement -- namely repairs and smaller updates and décor -- for the first time in two years,” writes Seth Basham, an analyst who follows the company for Wedbush. He notes that the results benefited from hurricane-related sales and a strong holiday season with a record Black Friday.

"We saw greater engagement in home improvement spend, despite ongoing pressure on large remodeling projects," said Ted Decker, Home Depot’s chair, president and CEO, in the announcement. "Throughout the year, we remained steadfast in our investments across our strategic initiatives to position ourselves for continued success, despite uncertain macroeconomic conditions and a higher interest rate environment that impacted home improvement demand."

Those efforts are paying off, writes Jaime Katz, an analyst who follows the Home Depot for Morningstar. “The firm's continuous improvement in delivery, customer insights, and digital options allows for a better consumer experience that attracts both pro and DIY customers (which we think supported Home Depot's 0.9% growth in big-ticket transactions in the quarter).”

At Lowe’s, total sales for the quarter were essentially flat at $18.6 billion, and comparable sales eked out a 0.2%, “driven by high-single-digit Pro and online comparable sales, strong holiday performance, and rebuilding efforts in the wake of recent hurricanes,” the company said in the earnings announcement.

The Mooresville, North Carolina-based chain delivered impressive bottom-line results, with a net profit of $509 million, compared to a $824 million loss in the year-ago period.

“Although Lowe’s sales growth is respectable, the inevitable comparison with Home Depot -- whose comparable revenue uplift was more than double that of Lowe’s -- takes some of the luster off the numbers,” writes Neil Saunders, managing director of GlobalData Retail, in his analysis.

 “On the sales front, Lowe’s benefited from the strength in consumer confidence and the housing market and was also a beneficiary of trends like winter home preparation. The company also deserves credit for improvements to merchandising and assortments in store, both of which have helped to lift conversion rates. However, it is also clear that most of these gains come from existing customers, not new shoppers that Lowe’s needs to win from Home Depot or others.”

Both companies offered subdued guidance for the months ahead, indicating plenty of question marks still hanging over consumer spending. Home Depot expects total sales growth of 2.8% in the coming fiscal year, with comparable sales gaining just 1%. And Lowe’s anticipates comparable sales to be flat or up 1%.

Those projections may be conservative. “The Home Depot does not assume any changes in the interest rate environment nor improvements in housing turnover, with continued pressure on larger discretionary projects,” writes Basham. “Despite the housing market uncertainty, home improvement looks to be on its way towards normalization.”

For the long term, says Katz, “as the housing market normalizes, we forecast 4% average top-line growth.”