Home Depot, Lowe’s Profits Fall as Housing Market Slows in a Weak Economy

<img decoding="async" class="lazyload size-full-width wp-image-1601171" src="data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==" data-src="https://observer.com/wp-content/uploads/sites/2/2025/11/GettyImages-1016772610.jpg?quality=80&w=970" alt="Exterior of Home Depot store ” width=”970″ height=”647″ data-caption=’Home Depot’s financial struggles were exacerbated by a recent decrease in extreme weather. <span class=”lazyload media-credit”>Photo by Justin Sullivan/Getty Images</span>’>

Home Depot and Lowe's reported quarterly profit declines as customers continue to cut back on home renovation, repairs and DIY projects. The two retail chains have faced mounting financial pressure in recent months, weighed down by a sluggish housing market and continued economic uncertainty.

“We believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand,” Home Depot CEO Ted Decker said on an earnings call yesterday (Nov. 18). Lowe’s chief Marvin Ellison similarly told analysts today (Nov. 19) that the retailer is facing “softer demand within an uncertain macro environment.”

During the August-October fiscal quarter, both companies reported falling profits. Home Depot’s net income slipped by 1 percent year-over-year to $3.6 billion from $3.65 billion, while Lowe’s profit fell nearly 5 percent to $1.62 billion from $1.7 billion. Despite the pressure, revenue rose roughly 3 percent at both companies. Comparable sales, or revenue from stores open at least one year, grew 0.2 percent at Home Depot and 0.4 percent at Lowe’s.

The two retailers are often considered bellwethers for consumer sentiment, since their financial performance often reflects how factors like housing-market conditions and inflation shape customers’ willingness to take on major home improvement projects. Both companies trimmed their full-year profit forecasts this week, signaling a tougher economic backdrop. Home Depot noted that it now expects earnings for 2025 to decline about 5 percent, a sharper drop than its earlier estimate of 2 percent, while Lowe’s said its full-year earnings will likely land at the lower end of its previous guidance.

Mortgage rates, which have held above 6 percent, are dampening demand for home improvement projects as fewer people buy and sell homes. “What we are seeing now is even less turnover,” said Decker. Between January and September, only 28 out of every 1,000 homes changed hands, marking the lowest turnover rate in at least a decade, according to a report from Redfin.

Consumer strain has been intensified by policies like the Trump administration’s tariffs, which have pushed up prices. Home Depot signaled modest price increases in August due to its reliance on imports for about half of its inventory. Lowe’s, which sources roughly 40 percent of its products overseas, also raised prices during the quarter.

A recent decline in extreme weather also led to weaker demand for roofing, power generation and plywood. The roofing shipments, in particular, have fallen by “double digits” this year due to the absence of storms, said Home Depot’s Decker.

But physical factors alone don’t explain the slowdown. Decker said broader economic uncertainty—driven by living costs, layoffs and job concerns—is also holding back demand. “That is why we do not see an uptick in that underlying storm-adjusted demand in the business,” said the CEO. Home Depot’s stock is down by nearly 1 percent today.

Lowe’s, however, struck a slightly more optimistic note, citing strength in categories such as windows, doors, water heaters, and kitchen and bath businesses. These trends represent “signs of life in areas that make us cautiously optimistic that maybe there are brighter days ahead,” said Ellison, whose company saw its shares rise 5 percent today.