5 takeaways from Home Depot and Lowe’s earnings on the future of the DIY market

“For most people, their home is their biggest asset, and home prices continue to rise,” said Home Depot CEO Ted Decker on an earnings call Tuesday. “This has led to record levels of home equity, giving our customers confidence to invest in their homes. The housing stock is aging, and 55% of homes are 40 years or older. And we know, as homes get older, they require more maintenance and updates.”

The Home Depot reported $39.9 billion in total sales in the first quarter, while Lowe’s reported $20.9 billion. As giants in the DIY and home improvement space, they both laid out plans for how to continue to cater to this market going forward. Here’s a rundown of their strategies.

A focus on catering to small projects, appliances and seasonal demand

Housing sales across the nation are at something of a standstill, with affordability challenges brought on, in part, by high interest rates. This means that current homeowners are staying in their homes longer and taking on DIY projects to upgrade.

But right now, the projects that people are taking on tend to be smaller scale, like painting or landscaping jobs versus larger renovations or remodels. Billy Bastek, evp of merchandising at Home Depot, said kitchen and bath remodels are softer, as those projects typically rely on financing that’s slowed down due to higher interest rates. But the company still sees potential to be ready to meet the demand for smaller projects and hold out for inflection points around larger remodels. As Home Depot’s Decker said, there’s currently an addressable market of around $1 trillion for the DIY industry. “We remain bullish on the fundamentals of home improvement,” he said.

At Lowe’s, evp of merchandise Bill Boltz said on Wednesday’s earning call that some of the DIY softness is made up by larger ticket appliance purchases in laundry, refrigeration and cooking. “Roughly 100,000 appliances break every day, so you’ve gotta be ready for that in our in stock position,” he said. In response, the company is focusing on stocking core categories and seasonal items to drive sales with DIY customers. Memorial Day sales events, for instance, will include sales on products like mulch and 40% off certain appliances.

Determined to keep prices competitive

Despite changing tariff policies potentially pushing up costs for products and vendors, both Home Depot and Lowe’s indicate they’re looking to avoid any price increases at this time. Home Depot’s Bastek said on Tuesday the company aims to maintain prices across its portfolio. “We don’t see broad-based price increases for our customers at all going forward,” he said. “It’s a great opportunity for us to take share, and it’s a great opportunity for our suppliers to take share, as well.”

Lowe’s Ellison said the company would take a portfolio approach to pricing, using elasticity data from different markets and products to help inform decisions. But he also said the company is focused on staying competitive. “I think the key point for us is that we’re gonna be really price competitive in the home improvement channel like we always are,” he said. “We’re not in the habit of donating market share to the competition,” Ellison said.

One way that Lowe’s will be looking to offer more value is by expanding its online marketplace using the technology vendor Mirakl. Ellison said this will allow the company to offer more products quickly and efficiently, without having to add inventory to its balance sheet. “This will add new product categories across the home and offer DIY and pro customers a full spectrum of value and premium products. [We] can accomplish all of this without having to carry the inventory or invest in new fulfillment centers,” Ellison said.

Investing in new AI-powered tools to guide customer decisions

The first quarter saw both Lowe’s and Home Depot promote new AI-powered tools that aim to help customers with their DIY projects and make product suggestions.

Home Depot last year started rolling out Magic Apron on its app and product pages. It uses generative AI based off of proprietary expertise and summaries of product reviews to give recommendations and answer questions. At Lowe’s, a tool called Mylow launched in collaboration with Open AI will give step-by-step instructions for projects, as well as product recommendations.

While neither company shared data on how many customers are using these tools, both pointed to them as ways to enhance the customer experience and, in particular, drive online sales.

Catering to professional markets

Both Lowe’s and Home Depot pointed to the relative strength in professional customer segments this quarter, citing mid-single-digit year-over-year growth. And, looking ahead, they’re planning to roll out new services and offerings to cater to this demographic.

The Home Depot is looking to push its new credit program from Home Depot Core Pro. So far, enrollment numbers are in the low thousands, Decker said. The company also expanded its relationship with paint giant Behr to exclusively offer KILZ primer, a brand favored by professional painters and contractors. Decker said that the exclusive will “deepen our relationship with our Pro customers, allowing us to continue to gain share in this important space.”

Over at Lowe’s, where pro sales saw mid-single-digit growth, the pro strategy will be boosted by an acquisition of Artisan Design Group announced in April. The company distributes and installs flooring, countertops and cabinets to home builders across the country. Ellison said new home construction will be a major driver of professional spend at Lowe’s over the next decade. “We expect this acquisition to increase our penetration of pro plan spend and position us to gain share in a highly fragmented $50 billion market,” he said.