Why is this pivot considered risky?

Because it may mask a slowdown in the core retail business, which still generates the majority of revenue. Neglecting this segment could lead to declining sales and profits.

How does competition from Walmart and Costco affect Home Depot?

Walmart and Costco are expanding their home improvement offerings, pressuring Home Depot's market share and forcing the company to seek new growth avenues.

How has Home Depot's stock performed recently?

Home Depot's stock has declined about 5% year-to-date as of the report, while Lowe's stock has gained 3% over the same period.

Home Depot's Pro-Focused Pivot Risks Core Retail Business

Home Depot's management is betting on a new growth story through acquisitions, but the silence around its slowing core retail business is what investors need to hear.

July 9, 2026

2 min read

Source: Trefis

According to an analysis by Trefis, Home Depot's (NYSE: HD) pivot toward the professional segment through acquisitions could put its core retail business at risk. While management promotes a new growth narrative, the slowdown in its big-box stores remains the critical issue.

Recommendation Change

The report does not cite a specific analyst rating change but rather offers a strategic analysis highlighting potential risks.

Analyst's Rationale

The analysis suggests that Home Depot's $18.25 billion acquisition of SRS Distribution aims to strengthen its position in the pro market but may distract from its core retail operations, which are experiencing a slowdown. Competition from Walmart (NYSE: WMT) and Costco (NASDAQ: COST) in the home improvement space is also intensifying.

Context

Home Depot's stock has declined about 5% year-to-date as of the report, while Lowe's (NYSE: LOW) has gained 3% over the same period. Same-store sales at Home Depot decreased in the latest quarter.

What to Make of It

While the pro-focused strategy may drive long-term growth, investors should closely monitor the performance of the core retail business. Any further deterioration could weigh on the stock.

Frequently Asked Questions

Home Depot is focusing on the professional segment (contractors and builders) through acquisitions like SRS Distribution, shifting focus from its core retail business for DIY customers.

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This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.