U.S. home improvement retail market trends

Major U.S. home improvement retailers Home Depot and Lowe’s are navigating a period of slowing growth attributed to market saturation and macroeconomic pressures, including high interest rates and inflation.

While Lowe’s achieved an 11% increase in net sales growth for the first quarter of 2026, outpacing Home Depot’s 5% growth, new data reveals diverging operational trends. Home Depot has reported five consecutive quarters of declining comparable customer transactions, including a 1.3% drop in the most recent fiscal first quarter. To offset this, Home Depot has relied on higher average ticket prices and acquisitions to drive revenue. Specifically, fiscal first-quarter sales grew 4.8% year-over-year to $41.8 billion, with the average customer spending $92.76 per transaction.

Both companies maintain long histories of consistent dividend payments, though their recent strategies differ. Home Depot offers a higher annual dividend yield of 2.7% at $9.32 per share, whereas Lowe’s recently implemented a larger percentage dividend increase of over 4.2%, compared to Home Depot’s 1.2% hike.

Investor activity remains active in the sector. Confluence Wealth Services Inc. increased its Home Depot position by 28.8% during the second quarter, holding shares valued at approximately $6.96 million. Other major institutional holders, such as Vanguard Group Inc., State Street Corp, and Geode Capital Management LLC, have also recently modified or increased their stakes in the retailer.