Home Depot Bets on Pros Again: Will It Reignite Growth in FY25?

The Home Depot Inc. HD continues to solidify its leadership in the home improvement market, driven by robust momentum in its Professional (“Pro”) customer segment, even as big-ticket discretionary demand remains soft. In first-quarter fiscal 2025, Pro sales outpaced DIY sales, with strong performance in Pro-heavy categories like gypsum, decking, concrete and fencing, highlighting the success of Home Depot’s targeted investments in its Pro ecosystem. Investment in the Pro ecosystem includes expanded delivery capabilities, dedicated sales support and exclusive product lines such as KILZ primers, as the company aims to capture more share in a fragmented $1-trillion market.A major catalyst has been the integration of SRS Distribution, which is now managing trade credit for Home Depot’s Pro customers. Early onboarding has already improved engagement, and management expects credit access to further lift project-based sales. Markets with full Pro capabilities, like flatbed distribution and order systems, are already outperforming, supporting broader expansion plans.Complementing its logistics upgrades, Home Depot is enhancing the Pro experience with specialized sales teams, improved CRM tools, a streamlined B2B website, and loyalty-based pricing programs. These initiatives have already generated more than $1 billion in incremental annualized sales across 17 key markets. With high engagement from Pros across all project sizes, Home Depot remains committed to expanding its Pro market share by continuously enhancing convenience, service and product availability.While macro uncertainty and elevated interest rates continue to dampen demand for big-ticket DIY projects, Home Depot sees significant long-term potential in delayed Pro spending. Backed by a solid customer base, a maturing Pro ecosystem, and strong momentum from SRS Distribution, Home Depot is strategically positioned to capitalize on this pent-up demand—assuming the broader economic backdrop begins to ease.Home Depot’s Competitors in This SpaceLowe’s Companies Inc. LOW and Floor & Decor FND are key competitors to Home Depot’s Pro business category.Based in Mooresville, NC, Lowe’s is the second pillar of the home improvement retail duopoly, trailing industry leader Home Depot. Both companies cater to millions of homeowners, DIY customers and Pro contractors across North America. However, Lowe’s, operating around 1,740 stores and holding a market cap of $128.2 billion, remains smaller in both scale and reach. While its Pro business is gaining momentum, it still represents roughly 25% of sales compared with more than 50% at Home Depot. Nonetheless, the Pro segment is a strategic priority for Lowe’s, which is actively investing in loyalty programs, dedicated Pro zones, enhanced fulfillment capabilities and upgraded B2B digital tools. Both retailers compete for small to mid-sized Pros, but Home Depot maintains a lead with a more mature ecosystem, particularly in complex project management, trade credit and nationwide Pro delivery. As Lowe’s builds out its Pro infrastructure, it increasingly overlaps with Home Depot in core categories like building materials, electrical and plumbing, though Home Depot continues to dominate when it comes to large-scale, multi-faceted Pro jobs.Floor & Decor is a fast-moving challenger disrupting the hard surface flooring space with a focused, high-growth strategy. By concentrating exclusively on hard surface flooring, FND has carved out a distinct niche, leveraging a specialized, high-volume business model and warehouse-format stores to drive low costs and rapid inventory turns. Floor & Decor resonates strongly with both professional installers and style-driven homeowners through its curated, design-forward offerings at competitive prices. Although FND's Pro market share is still smaller than Home Depot’s, it is gaining ground steadily through a suite of Pro-centric services — dedicated support teams, mobile ordering and exclusive volume-based pricing. While HD commands a broader reach and infrastructure advantage, particularly in general home improvement, Floor & Decor directly overlaps with HD in flooring solutions, wherein it competes on depth, specialization and Pro-focused execution.The Zacks Rundown for Home DepotHD shares have lost 4.2% year to date compared with the industry’s decline of 7.3%.Image Source: Zacks Investment ResearchFrom a valuation standpoint, Home Depot trades at a forward price-to-earnings ratio of 24X, significantly higher than the industry’s 21.24X. It carries a VGM Score of B.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for HD’s fiscal 2025 earnings implies a year-over-year decline of 1.3%, whereas its fiscal 2026 earnings estimates suggest year-over-year growth of 9.3%. The estimate for fiscal 2025 has been northbound in the past 30 days, while that for fiscal 2026 EPS has moved south in the same period.Image Source: Zacks Investment ResearchHome Depot currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lowe's Companies, Inc. (LOW): Free Stock Analysis Report The Home Depot, Inc. (HD): Free Stock Analysis Report Floor & Decor Holdings, Inc. (FND): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks