Home Improvement - May 2026 EHS Deep Dive; Trends Pick-Up, But Will They Stick?

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Home Improvement - May 2026 EHS Deep Dive; Trends Pick-Up, But Will They Stick?

June 9, 2026

Company: Risks That May Impede Achievement of the Recommendation, Rating or Target

Price:

Home Depot, Inc. Risks to the Home Depot Story? 1) Large Pro initiative is more margin dilutive than

expected; 2) Larger pro customer sales pressures margins long term; 3) Extended

downturn coming out of the COVID pull forward of demand; 4) Higher-for-longer

interest rates and lower consumer confidence weighs existing home sales and

remodel demand and 5) Tariffs drive up prices and cause elasticities to deteriorate.

Lowe's Companies, Inc. Risks to the Lowe's Story? 1) Consensus embeds too much of a step-up in SSS

during the 2H leading to a revision lower in numbers into 2026; 2) Expectations are

already for multiple rate cuts by the end of the year which should lead to improved

remodel activity but may be delayed since there isn't a great analog to where we

are in the cycle today; 3) Large Pro initiative distracts LOW's team from closing the

gap in the legacy home improvement business; 4) DIY continues to Underperform

Pro leading to outsizes share gains by Depot vs Lowe's.

Floor & Decor Risks to the Floor & Decor Story? 1) Rate cuts cause an acceleration in demand that

unlocks the housing market increasing flooring demand; 2) Elasticities from price

increases come in less than expected leading to SSS upside; 3) Mgmt re-accelerates

new store growth and existing stores close the productivity gap vs older store

vintages; 4) Existing home sales and housing turnover pick up, leading to improved

demand; 5) Expansion into international markets leads to further unit growth upside

potential; and 6) Price gaps widen vs smaller scale competitors leading to share

gains at FND.