Lowe's Companies, Inc.’s LOW second-quarter fiscal 2025 performance offers insight into the company’s customer strategy. While the company delivered comparable sales growth of 1.1% driven by solid performance in both the professional (Pro) and do-it-yourself (DIY) segments, the narrative is firmly centered on the Pro customer. Lowe’s Pro segment continued to grow, building on mid-single-digit gains last year. LOW hinted that survey results showed professional customers remain confident in near-term demand, supported by stable backlogs.
The recent acquisition of Artisan Design Group (ADG) and the pending buyout of Foundation Building Materials (FBM) position Lowe’s to capture a greater share of the Pro market, especially large, planned projects spanning drywall, ceilings, insulation, flooring, cabinets and countertops. A major draw of the FBM acquisition is its strong foothold across California, the Northeast and the Midwest, where Lowe’s has a limited footprint.
While DIY sales improved, management acknowledged that many homeowners are deferring bigger discretionary projects amid high mortgage rates and low housing turnover. Amid expectations for substantial new home construction and a significant backlog of deferred renovation projects, Pro spending offers a more resilient growth engine. Lowe’s plans to leverage FBM’s job-site delivery network, AI-powered estimating tools and trade credit solutions to deepen relationships with professional customers while cross-selling complementary Lowe’s products.
DIY demand remains important, driven by repair, remodel and maintenance projects, but the mix appears to be shifting. Pro sales not only diversify revenue streams but also offer higher ticket sizes and recurring demand from commercial and residential builders. The combined capabilities from ADG and FBM are expected to accelerate Pro penetration.
Home Depot and Floor & Decor Eye Pro Customers for Growth
The Home Depot, Inc. HD is stepping up its focus on Pro customers through its expanding Pro ecosystem, acquisitions like SRS and the pending GMS deal. In the last reported quarter, Home Depot saw comparable sales growth in both Pro and DIY segments. Pro customers drove demand in key areas such as dimensional lumber, concrete and decking, while DIY customers boosted sales across patio furniture, grills and live plants. Home Depot expects its broader product mix, job site delivery network and trade credit options to deepen professional contractor engagement in 2025.
Floor & Decor Holdings, Inc. FND also reported strong momentum with Pro customers, noting that professional sales once again outpaced total company growth. Floor & Decor is expanding warehouse-format stores, hosting Pro events, and introducing lead generation tools to capture more complex, high-ticket projects. Floor & Decor views the Pro segment as central to driving recurring sales and long-term growth.
What the Latest Metrics Say About Lowe’s
Lowe’s shares have risen 5.4% in the past year compared with the industry’s growth of 8%.
Image Source: Zacks Investment ResearchFrom a valuation standpoint, Lowe’s trades at a forward price-to-earnings ratio of 19.98, higher than the industry’s 23.00. LOW carries a Value Score of C.
Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for Lowe’s current financial-year sales and earnings implies year-over-year growth of 1.6% and 2.8%.
Image Source: Zacks Investment ResearchLowe’s currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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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).
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