The Biggest Bright Spot:
Mortgage Rates Finally Started Cooperating
Last week, one of the most encouraging signals isn’t found inside either Big Box earnings report.
Mortgage rates dipped below 6%… for the first time since 2022. A “5”- handle doesn’t just change the math.
It changes behavior. It’s a confidence signal.
That matters, because housing turnover is still the fuel source for the entire home improvement engine.
This is a real change in tone… and it endorses a more optimistic outlook heading into 2026.
After all, the past few months have felt like a tug-of-war.
Affordability perceptions permeated all sectors… not just housing.
And as if on cue, The Home Depot and Lowe’s quarterly results landed this same week with a clearer message for the building products manufacturing industry:
The customer hasn’t left the market.
They’re simply changing how and when they spend.
And for Building Product Brands focusing on sales and marketing alignment strategies following IBS/KBIS last week… the news is a meaningful distinction.
Q4 Results: The Numbers… and the Meaning
The Home Depot turned in $38.2B in Q4 revenue and $2.72 in adjusted EPS… both ahead of expectations.
Home Depot’s $18.25B SRS Distribution deal (finalized in 2024) continues to gain ground. Winning roofers, landscapers and pool contractors too.
Comparable sales finally edged positively. Transactions were down (-1.6%) – yet importantly – the average ticket rose (+2.4%). Translation? Greater gross margins. Fewer trips.
Lowe’s delivered a similarly constructive read: $20.58B in Q4 revenue, $1.98 adjusted EPS and +1.3% comparable sales.
Lowe’s continued growth in the areas manufacturers care about most: Pro, online… plus value-added services.
And to the full-year 2025 view, the song remains the same: The Home Depot ended FY2025 at $164.7B (+3.2%). Lowe’s grew to $86.3B (from $83.7B)
Transactions are softer – tickets are stronger – and online continues to gain.
This is a market that’s selective.
And increasingly rewarding value, productivity and outcomes.
What This Means for Building Products Manufacturers
Home Depot and Lowe’s are both saying the same thing
Big discretionary projects are still uneven.
But the underlying market is stabilizing… and the strategies being built right now are designed to win when the cycle loosens. As the mortgage rates are signaling.
1) Pro is not a segment, it’s the strategy
Both retailers continue to emphasize Pro growth. Pro capability. And Pro execution.
For manufacturers, this changes how to think about influence:
If thought leadership stories aren’t relevant to the jobsite…
When a product isn’t easy to specify, estimate, install and justify…
And the value proposition isn’t obvious in 10 seconds…
…it’s going to be harder to win share – when assortments reset – and Pro loyalty gets courted harder.
This is where building material marketing must sound less like “branding”.
And resonate more like productivity advantage.
2) Fewer transactions + higher ticket = selective spending
This pattern is a gift… for those who know how to message the opportunity.
It confirms to the channel that audiences are spending. But they’re editing their decisions:
- Fewer impulse buys
- More intentional projects
- Higher scrutiny of ROI
That’s not bad news for manufacturers.
It’s a cue for clarity.
3) Home Improvement retailers are building ecosystems, not just aisles
Lowe’s emphasis on online + services isn’t a footnote. It’s a model shift.
The Home Depot’s long-term posture reflects the same: distribution, Pro capability and making projects easier to plan and execute.
For manufacturers, that means:
- Stronger demand for content and tools that reduce friction
- More need for jobsite-ready proof… in the form of case studies, project profiles and testimonials
- More importance placed on how products and solutions perform inside a system
What to be Watching into 2026
The big question isn’t whether audiences will spend on challenger brands.
It’s when they decide the timing is right – and which categories – are worth it.
Q4 and Full Year Earnings Reports are signaling that the market is active… albeit selective.
When rates ease as they so justly delivered this week and confidence returns – the winners will be determined by execution – not hype.
How did your team perform at IBS/KBIS last week? Were competitors showing up in unexpected ways? Simply “hit reply” and email Steve at sk@kleberandassociates.com to compare notes for gaining share on 2026 growth enablement opportunities together.
