Home Depot comps finally catch Lowe’s, opening the door for the stock to do the same
It took nearly a year. But it finally happened this quarter. Home Depot ‘s comps matched Lowe’s , giving investors a reason to keep faith in the troubled stock. For months and months now, Jim Cramer has been frustrated at Home Depot’s inability to keep pace with rival Lowe’s — both in comparable sales and in stock performance. But this week’s fiscal first-quarter earnings reports from each of the home improvement retailers signaled that the playing field is leveling out. Going into Tuesday morning’s earnings from Club name Home Depot, Jim was initially worried that it focused too much on the Pro market. “But it’s starting to work,” he acknowledged after the print. Home Depot shares jumped more than 5% this week after an encouraging quarter. Lowe’s dropped 1.5% on rather underwhelming results. Both companies reported fiscal Q1 comps, or same-store sales, growth of 0.6%. This key metric is used to track the performance of the retailers’ physical locations and websites over a period of time. According to FactSet, analysts estimate that parity will continue in the upcoming second and third quarters, with growth of 0.9% and 1.5%, respectively, for both companies. Home Depot is then expected to start to pull ahead. “It seems like Home Depot might be back to outcomping Lowe’s in the coming quarters,” said Mizuho analyst David Bellinger. “You’re going to be lapping some of these larger financed projects that just have been pretty dead for a while. And, then you get the [SRS] acquisition layering on top of it — and that gives them a little extra juice versus Lowe’s.” SRS Distribution is the anchor of Home Depot’s Pro business, which accounts for roughly 55% of sales versus 45% from the do-it-yourself (DIY) cohort. Home Depot closed its more than $18 billion acquisition of SRS, which serves roofing, landscaping, and pool contractors, in June 2024. It bought building materials distributor GMS for over $4 billion in September 2025. Last week, Home Depot completed its acquisition of HVAC supplier Mingledorff’s. Home Depot was earlier to expand pro, but Lowe’s is also now widening its reach. Traditionally skewed more DIY, Lowe’s bought Foundation Building Materials in October 2025 for $8.8 billion. According to Bellinger, Lowe’s will start seeing FBM factor into comps toward the back half of this year. He said it takes roughly 13 months for the acquisitions to get to show up in the numbers. “Going forward, I like HD’s Pro exposure,” said Jeff Marks, director of portfolio analysis for the Club. “It will shine more if and when the home improvement cycle turns, but that hasn’t happened yet.” The home improvement cycle has not turned yet due largely to elevated mortgage rates. Better times for both Home Depot and Lowe’s depend on lower rates spurring housing. Lower interest rates, however, might not be in the near-term cards, even with new Federal Reserve Chair Kevin Warsh . While President Donald Trump has made no secret of his desire for rate cuts, Warsh may find it tough to rationalize them because of inflation worries sparked by the Iran war-spike in oil prices. HD LOW 1Y mountain Home Depot vs. Lowe’s 1 year Over the past 12 months, neither stock has set the world on fire — Home Depot declined 15% versus a more than 4% drop for Lowe’s. The S & P 500 has gained nearly 30% over the past 52 weeks. Lower rates are the key unlock for both their businesses and their stocks. But in the meantime, we are looking for Home Depot’s stock to narrow its underperformance gap, just as the company has done on the business side. (Jim Cramer’s Charitable Trust is long HD. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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