Pro customer ecosystem growth

“That is why we have been investing and executing on our strategy to create the best interconnected experience for a Pro wallet share through a differentiated set of capabilities and build new stores.”

“The good news is on their greenfield operations, it's reasonably capital light, at least a more modest-sized facility than a Home Depot DC would be, think of this as a branch operation. And high turning inventory and variable pay for the sales force.”

“As we've mentioned in the past, we're investing in markets. In last year, we had 14 markets we invested in. We'll be fully invested in 17 markets this year. And when we talk about investing in markets, it's a distribution supply chain capability play, foundational capabilities that help us better serve the Pro and then most importantly, our expansion of our outside sales team.”

“Pro certainly outperformed due to selfers in the quarter. And as we have mentioned, we continue to invest in the Pro ecosystem to accelerate growth and really drive and grow the share of wallet.”

“SRS has a track record of growing faster than their competition in all of their verticals and has done so for the last 15 years.”

“Pro's outperformed the DIY customer, but both were negative for the quarter.”

“Our trade credit pilot program is also underway, and while it's still early days, we have seen the program resonate with our customers and the benefits of extending credit for larger scale products that are stayed for a longer period of time.”

“We are pleased to announce that we now have key full capabilities in 17 markets, including a broader product assortment, digital assets, a sales force and broader fulfillment options.”

“To drive conversion for specialty customers, we launched a new platform known as Pipeline Management that enables interconnected product selling for kitchen designs.”

“We are gaining share of wallet with our customers whether they are shopping in our stores, on our digital assets or through our Pro ecosystem.”

“We plan to drive incremental growth through several sales and cross synergy opportunities. We'll make their more comprehensive product offering in roofing, pool and landscape available to all our customers through our Pro desk, and we will offer SRS customers a form of credit tied to their account, which will make purchases at Home Depot stores much more convenient.”

“As you would expect, the immediate focus with SRS is supporting their growth both organically and through acquisitions. However, we are also seeing incremental cross-sale opportunities from our distinct product catalogs and competitive advantages.”

“This is also the first quarter that reflects a full period of SRS in our financials. SRS gives us the right to win with the specialty trade Pro customer who need specialized capabilities to complete their project.”

“We recently introduced a Pro Customer Experience Manager to help drive a higher level of connectivity with our in-store pro and outside sales team in order to deliver a more seamless experience and exceptional service.”

“During the third quarter, pro sales were positive and outpaced the DIY customer. And, those pros engaging with elements of our Pro Ecosystem, who also have a dedicated salesperson, were our strongest performing pros in the quarter.”

“We believe that we will grow market share in any environment. We are continuing to invest to strengthen our competitive position with our customers and leverage our scale and low cost position to drive growth faster than the market and deliver shareholder value.”

“The comp sales of SRS product through The Home Depot ecosystem, while obviously a very small base is accelerating incredible sort of triple-digit comp growth with those specific sales.”

“We are pleased with the performance of this Pro Ecosystem which is now in 17 U.S. markets.”

“We expect their organic sales to grow mid-single digits in fiscal 2025.”

“In June, we completed the acquisition of SRS, And while we've only owned them for seven months, could not be happier with the business. The capabilities that SRS brings are both additive and complementary to our strategic efforts.”

“SRS was already in quote center but not in all markets. Today, they are in nearly every market with their roofing products. And since making this change, have seen SRS's sales and quote center more than triple”

“We know that nearly all pro shop for stores.”

“We also continue to build out a more comprehensive set of capabilities in our Pro ecosystem. These capabilities include a broader and deep assortment of products in the FTC, dedicated sales teams that provide a higher level of service, enhanced selling tools with CRM capabilities, to better serve our customers, additional digital capabilities through a b to b website, loyalty, and preferred pricing programs.”

“In fact, these investments have driven over $1 billion in incremental sales on an annualized basis in seventeen markets.”

“Even in these seventeen markets, we are in different stages of maturity, and there's still a lot to do to better serve all our pros.”

“During the fourth quarter, both pro and DIY comp sales were positive. With pro outpacing the DIY customer.”

“We we believe it's like, four hundred odd thousand trades folks short And not sure how that number would would change with any any meaningful change in in immigration”

“This is an entire entire ecosystem. Right? So it's not just one component of the ecosystem.”

“If you just look at their growth by the three verticals they operate in, we exceeded our expectation. We believe they're taking share in each of those three verticals.”

“During the first quarter, pro comp sales were positive and outpaced the DIY customer.”

“We're also focused on maturing our Pro ecosystem to better serve Pros working on large, complex projects. SRS is now managing our trade credit program, and we are seeing tremendous results as we onboard Pros to the program.”

“And SRS continues to perform above our expectations as our teams work together to gain share.”

“In fact, SRS will now have a network of more than 1,200 locations, a sales operation of over 3,500 associates, and a fleet of nearly 8,000 trucks capable of making tens of thousands of job site deliveries per day.”

“As you know, we've been leveraging SRS to continue to ramp up our trade credit capabilities. Today, we have several thousand pros with a trade credit account, and we've seen a double-digit lift in their spend across channels once these pros started using their trade credit.”

“And later this year, we anticipate that all trade credit customers will be able to seamlessly use TradeCredit for in-store purchases.”

“Our order management system is another important capability that enables us to more easily manage pro product deliveries throughout the life of their project.”

“Roofing is the biggest category. Also pool and landscape. And those are verticals that they run as a specialty trade distributor.”

“We believe GMS is the best property, the best asset in that space.”

“We think this will be a seamless integration under that SRS platform.”

“We have an additional 400 nodes of distribution to add to the 800 that SRS already have.”

“It's still such early days with trade credit, and we have millions of pro customers, and we've literally had small single-digit thousands on trade credit. So this virtuous cycle of the whole ecosystem trying to work is gaining steam.”

“When you think about an SRS branch, comparatively speaking, the capital required and then the return on that capital through time is actually lower capital required on a percent of sales basis than a Home Depot store would be.”

“If you take our DFCs and you look at where they are on their maturity curve, they're actually generating higher returns on invested capital than an equivalent Home Depot store would at this point in their life cycle.”

“Technology investments to drive productivity, the capabilities we are building with our Pro ecosystem to better serve complex purchases, and faster delivery for all of our customers are growing market share with these initiatives.”

“Over the past year, SRS has exceeded our expectations, driving market-leading growth, accelerating our organic ecosystem efforts, and driving revenue synergies.”

“As we announced in June, we are excited about the pending acquisition of GMS, a leading distributor of specialty building products, including drywall, ceilings, and steel framing, related to remodeling and construction projects.”

“SRS actually comped flat for Q3. And so we think that they are taking significant share.”

“The first is a new project planning tool that we launched in September, which allows our pros to create and manage material lift and track orders and deliveries.”

“The second tool, blueprint takeoffs, will transform the way pros plan and prepare for their projects. This new tool leverages advanced AI and proprietary algorithms to deliver accurate blueprint takeoffs and material estimates in record time.”

“This technology replaces a manual intensive process that took weeks to complete, increasing accuracy and reliability.”

“Adding this advanced technology to our ecosystem of capabilities to better serve the pro working on complex projects will further enable us to be the one-stop shop for all project needs from initial planning to material delivery, saving our pros time and money.”

“But fundamentally, our job is to put great value propositions in front of the customer and take share in any environment. So can The Home Depot grow? The answer is yes.”

“the organic effort is reasonably asset-light. This -- regardless of whether we lease our DCs or not, the capital deployed in those DCs is first and foremost for general store replenishment.”

“there's not been a lot of incremental fixed cost put into the business to support the Pro organic initiatives.”

“SRS and GMS see seasonal swings that are greater than Home Depot. You're going to just see that amplified if you hold Q4 in isolation.”

“some of that big ticket is the success in our Pro initiatives. I mean the managed accounts, the activity that Mike Rowe and team are driving to capture more share of larger Pro complex purchase.”

“there is account handoffs that happen. So a great example, recently, with GMS engaged in a large roofing sale on a property, the customer was looking for much more in terms of product, in terms of whether it be framing, flooring and more.”

“On the branches, think of SRS GMS, 40 to 50 branches a year, and they've been sort of running at that pace since we acquired SRS.”

“SRS is much more in the reroof than new construction. So they're 80-plus percent reroof.”

“we think roofing shipments, you can see this by reported data, roofing square shipments into the market are down mid-teens and SRS was flat. So clearly taking share.”

“we look at SRS as a long-term mid-single-digit grower. And this is principally a storm impacted dynamic that's taken them down to flattish right now.”

“In addition, we continue to focus on our Pro ecosystem, maturing the new capabilities we have built for Pros working on complex projects while enhancing the tools we have to serve Pros.”

“The first is a new project planning tool that we launched in September, which allows our Pros to create and manage material lift and track orders and deliveries.”

“The second tool, blueprint takeoffs, will transform the way Pros plan and prepare for their projects. This new tool leverages advanced AI and proprietary algorithms to deliver accurate blueprint takeoffs and material estimates in record time.”

“This technology replaces a manual intensive process that took weeks to complete increase in accuracy and reliability.”

“Adding this advanced technology to our ecosystem of capabilities to better serve the Pro working on complex projects will further enable us to be the one-stop shop for all project needs from initial planning to material delivery, saving [ our ] Pros time and money.”

“SRS actually comped flat for Q3. And so we think that they are taking significant share.”

“identified real opportunity to bring increased value proposition to that Pro space by building out wholesale [indiscernible] type capabilities to capture more share of wallet with that customer.”

“And then we've augmented that with two acquisitions very, very strong wholesale platforms with each of SRS [ and ] GMS.”

“the model that SRS deploys is very similar to GMS that they will -- they'll drive organic comp growth through existing branches. They open greenfield branches, and then they'll focus on tuck-in customer list expansion-oriented acquisitions.”

“SRS is much more in the reroof than new construction. So they're 80-plus percent reroof.”

“we look at SRS is a long-term mid-single-digit grower. And this is principally a storm impacted dynamic that's taken them down to flattish right now.”

“roofing square shipments into the market are down mid-teens and SRS was flat. So clearly taking share.”

“Pro trade credit, there's continued investments this year to bring it online, to bring it down to a store level throughout the year versus a bit more focused on our outside sales right now.”

“that also enables our live tracking on big and bulky, which customers have come to expect on small items, but to be able to track live of bulky delivery, whether that's a flatbed rolling down with lumber to a job site or an appliance showing up at the home, that's been a really big win for our customers”

“One of the other capabilities that we've recently rolled out that allows our drivers to stay connected with our customers' needs is our delivery handheld device.”

“we saw continued growth in our trade credit efforts, along with strong early days from our AI blueprint takeoffs.”

“with the advent of AI tools, we're introducing a number of project management and list builders for our Pros, including things like an AI takeoff scheme, letting Pros build projects, just typing in the type of project they're working on in a pre-populated list of the project in the app for the Pros”

“We've been looking for 2 Sigma on time and complete for our delivery to our Pros, and we achieved that this past year.”

“the vision of being a point of contact for that Pro and cross-selling is really gaining momentum, which we're really, really happy about.”

“we're winning, frankly tens of thousands of incremental homes through a warm handoff with the other product categories that -- of the team that was introduced.”

“the ability to turn a multifamily construction and property management company from a significant customer of one of our companies to be that way for all of Home Depot, HD Supply, SRS and GMS.”

“This year, SRS grew organic sales by a low single-digit percentage and expanded market share despite pressured industry demand and lack of storms in the back half of the year.”

“we expect their organic sales to grow mid-single digits in fiscal 2026.”

“our dedicated unified Pro team, including a Pro customer experience manager continues to elevate the Pro experience in our stores by assisting Pros and serving as a main point of contact, ensuring a superior and cohesive shopping and fulfillment experience”

“During the fourth quarter, Pro posted positive comps and outperformed DIY.”

“While we're pleased that we delivered positive comps in Pro and online sales, we continue to manage through softness in DIY demand.”

“We now have the right brands for Pros, the right inventory quantities and the right product assortments to meet the needs of this demanding customer.”

“We recently rolled out MRCOOL mini split air conditioners in 1,200 stores. These ductless systems are known for their advanced technology, energy efficiency and ease of insulation, which means our DIY customers can now install their own mini HVAC system without having to hire a professional installer.”

“Looking ahead, we were pleased to hear from Pros on our recent survey that their backlogs remain healthy and consistent with last year. And what's also encouraging is that 75% of Pros are confident in landing new business.”

“Quonta Vance, our EVP of Pro and Home Services, at our upcoming Analyst and Investor Conference is going to lay out our long-term vision of where we plan to take Pro.”

“It includes driving pro penetration, accelerating our online sales, expanding our home services, creating a loyalty ecosystem, and increasing our space productivity.”

“We have built a base of 30 million members, who are now outspending nonmembers by nearly 50%.”

“We're now the only home improvement retailer to offer distinct programs for both DIY and pro customers.”

“With our new program, we've tailored our offerings specifically for our target customer, small to medium pros. They can start earning rewards immediately and can achieve higher rewards with lower levels of spending compared to the program offered by our largest competitor.”

“Now both our DIY and pro loyalty programs run on the same tech platform and use the same currency, MyLowe's Money.”

“With both loyalty programs now on one platform, our marketing team is able to better leverage the unique data the programs generate to tailor offers for our pro and DIY customers.”

“In our recent survey, pros indicated they are confident in their near-term prospects with stable backlogs.”

“We are confident that the new initiatives we laid out as part of our updated total home strategy will enable us to grow faster than the market and take share.”

“We're pleased with the continued growth in outdoor categories like roofing, siding, and decking, driven by our investment in pro inventory and our improved in-stocks.”

“This is critical for customers who need to replace a broken appliance immediately, as this type of purchase accounts for more than 70% of the industry's appliance sales.”

“In fact, we are the only retailer that can now deliver and install a major appliance the next day in almost every zip code.”

“We're pleased that we took share in a challenging market, especially when homeowners continue to exercise caution around spending on big-ticket discretionary items.”

“Like in outdoor power equipment, we are the only home center with both Toro, the leading gas-powered brand, and Ego, the leading battery-powered brand, truly an unmatched offering in retail.”

“Last week, we took the next steps in tailoring our offering for the small to medium pro with the nationwide launch of our redesigned pro loyalty MyLowe's Pro Rewards.”

“We are gaining momentum with our pro customer through a flywheel effect that we've created with a TransformPro offering, with the right brands and products, greater inventory depth, improved job site delivery, dedicated service levels, and a best-in-class digital experience.”

“Over the long term, we plan to utilize FBM's successful integration playbook, including a rapid transition to a single ERP platform.”

“With an estimated 18 million new homes needed by 2033, we envision incorporating the products and services from each company to provide large pro customers with everything from drywall to ceiling systems insulation to doors, as well as flooring, cabinets, and countertops.”

“Really a diverse and highly fragmented base. They have about 40,000 customers, and that's across the US and Canada. And just from a concentration account, no single customer accounts for more than 1% of the revenue.”

“Over 75% of the pros stated they were in their job prospects, which again is consistent with what we've heard in past quarters.”

“The only concern they gave us is, you know, labor costs are going up for them. And so one of the reasons why Lowe's is one of the champions, you know, in the business roundtable of trying to create these skill trade jobs in the country.”

“We do see in the future some smaller tuck-ins on specific verticals. But we don't have anything in our current site to do another large acquisition like this one.”

“There's no other player that can walk into a large single-family home builder, a large multifamily home builder, and create that type of proposition and do it, you know, with advanced technology.”

“In addition, we plan to use FBM's AI Blueprint Takeoff technology to enhance our offering at our Lowe's store Pro desk. Which will automatically extract material quantities and measurements from digital construction plans.”

“In the short run, we plan to add key FBM products along with their fulfillment capabilities to the Pro extended aisle in our Lowe's stores.”

“One of the most compelling aspects of the FBM acquisition is a strategic presence in key geographies such as California, the Northeast, and the Midwest. Regions where we currently have less of a presence.”

“FBM has a diversified customer base in its commercial business, including hospitals, data centers, and office buildings. This mix creates more stability, and better insulates the company from the ups and downs of the housing cycle.”

“FBM has a proven fourteen-year track record of growth and a strong reputation with both the residential homebuilder and with commercial pros across new construction and repair and remodel applications.”

“In our recent PRO survey, PROs indicated they are in their near-term prospects with stable backlogs.”

“today, we're excited to welcome DowTile to Lowe's, which is the best-selling tile brand in the country and the pro preferred choice for tile across residential and commercial projects.”

“We're also pleased with our ongoing efforts to build out our powerful pro brand lineup. Making sure that we have the brands and products that are most important to these customers.”

“We also launched the first home improvement creative network with MrBeast the world's most followed creator among the first to join.”

“We're now well positioned to not only continue driving growth with our core DIY, and small to medium pro customers, but this acquisition also unlocks our ability to serve the larger pro within a $250 billion total addressable market.”

“This acquisition represents a transformational move when it comes to advancing our total home strategy and enhancing long-term shareholder value.”