The news: Home Depot’s growing Pro business helped it beat expectations even as transaction volumes declined. Overall transactions fell 0.9% YoY, while comparable transactions dropped 1.3%, down from a 0.5% decline a year earlier.

The retailer is doubling down on that strategy. Its SRS Distribution subsidiary recently acquired Mingledorff’s, a Southeastern HVAC distributor, as Home Depot continues to build out its Pro-focused offerings to help it navigate a challenging environment.

Zooming out: A stagnant housing market remains a major constraint on large renovation activity, even as consumers continue to take on smaller projects. Several forces are keeping turnover low and big-ticket spending subdued:

• Mortgage rates remain elevated. After briefly dipping below 6% in February, rates have climbed again, with the 30-year fixed reaching 6.75% this week, per Mortgage News Daily—keeping many buyers on the sidelines.
• Consumers feel stretched. With inflation outpacing wage growth and gas prices rising, many are pulling back from major renovations. As CFO Richard McPhail noted, demand for categories like lumber, flooring, and lighting is lagging, while spending shifts toward smaller projects like gardening and painting.

The numbers:

• Net sales rose 4.8% YoY to $41.77 billion, ahead of Wall Street's $41.59 billion estimate.
• Adjusted EPS was $3.43 per share, down 3.7%, but exceeding the $3.41 analyst consensus.
• Comp sales rose 0.6%, missing the 0.8% forecast, and US comp sales rose 0.4%, short of the 0.9% expected.

Despite the challenging macro backdrop, Home Depot maintained its full-year guidance for flat to 2% comp growth and flat to 4% EPS growth. That’s a strong signal that Home Depot believes Pro demand and smaller projects can offset housing weakness.

Implications for retailers and marketers: Home Depot’s steady outlook makes clear that demand isn’t disappearing, but it is fragmenting. Smaller, necessity-driven projects and professional activity are sustaining baseline performance even as big-ticket renovations stall.

That dynamic favors brands tied to maintenance and seasonal needs. Categories like outdoor, paint, and garden should remain steady, and consumers are likely to respond to messaging focused on utility and timing more than aspirational renovation narratives.

For bigger-ticket categories, the Pro channel is proving more resilient. Professional customers maintain steadier project pipelines and are less sensitive to mortgage-rate swings than DIY shoppers. Brands in flooring, lighting, and cabinetry should consider leaning more heavily into pro-focused programs and targeted retail media to capture that demand.

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