Home Depot vs. Lowe’s: One Housing Recovery Play Stands Out
Both Home Depot and Lowe's are fighting the same frozen housing market, but their Q2 earnings reveal a widening gap between two very different strategies. One company is gaining ground while the other is quietly retreating.
Home Depot (NYSE:HD | HD Price Prediction) and Lowe’s (NYSE:LOW) both reported fiscal Q2 results in mid-August, and the earnings reports tell two different stories about the same frozen housing market.
Home Depot reaffirmed guidance on the back of 1.7% comp growth and Pro momentum. Lowe’s narrowed its full-year outlook to the low end after just 0.2% comps. Housing turnover sitting at 4.06 million is squeezing both, but not equally.
Pro Muscle Carries Home Depot, DIY Weakness Bites Lowe’s
Home Depot’s $47.86 billion in revenue was powered by broad-based smaller projects, with 13 of 16 merchandising departments posting positive comps and a record quarter in portable power tools.
The SRS Distribution footprint now spans 1,340 locations, and management said SRS comped above the company average. Richard McPhail summed up the tone plainly: “Our teams took share in a difficult environment.”
Lowe’s story is narrower. Revenue grew 8.34% to $25.96 billion, but that number leans heavily on the Foundation Building Materials and Artisan Design Group deals.
Online climbed 15.7%, and Pro kept growing, yet DIY penetration north of 60% is a problem when discretionary DIY is exactly what’s under pressure. CEO Marvin Ellison acknowledged as much: “Discretionary DIY demand remains under pressure.”
One Reaffirms, One Retreats
| Metric | Home Depot | Lowe’s |
| Q2 comp sales | +1.7% | +0.2% |
| Adjusted EPS | $4.92 | $4.40 |
| Comp transactions | -1.0% | -2.1% |
| FY26 guidance | Reaffirmed | Cut to low end |
Home Depot kept its flat to 2% comp outlook intact. Lowe’s trimmed sales to $92 billion, flat comps, and adjusted EPS to roughly $12.25. That is a real signal, not a rounding exercise.
Ellison told investors he would “take a view of the first half and basically make the assumption that the second half is going to look a lot like the first half.” Prudent, but hardly confident.
Housing Recovery Timing Decides the Winner
Housing starts fell 12.4% in July to 1.24 million, and McPhail described conditions as “frozen” for four straight years. I will be watching whether Home Depot’s SRS and GMS cross-sell (management targets a $400 million opportunity this year) keeps outrunning DIY softness.
For Lowe’s, ADG carries 100% residential construction exposure, so any thaw in new builds would matter disproportionately.
Why I Lean Toward Home Depot Today, But Watch Lowe’s for the Turn
Both stocks are down roughly 16% over the last year, and neither is cheap given the macro. If you want steadier execution and Pro reach, Home Depot’s reaffirmed guide and broader category strength make it the more defensible name for me right now, even at a P/E of 24 versus 18 for Lowe’s.
I would flip that view the moment mortgage rates step down meaningfully. Lowe’s higher DIY mix and ADG exposure give it more upside torque when housing turnover unfreezes. For a patient turnaround investor, that setup has appeal. For everyone else, Home Depot is doing more with the same lousy backdrop.
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Vandita Jadeja is a financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis. She has contributed to several publications, including the Joy Wallet, Benzinga, The Motley Fool and InvestorPlace.
