Over the previous few years, Dwelling Depot has been battling weak shopper demand, as considerations over inflation and housing affordability have led buyers to shift their spending habits.
In Dwelling Depot’s second-quarter earnings report for 2025, it revealed that its U.S. comparable gross sales elevated by 1.4% yr over yr. Nonetheless, information from Placer.ai revealed that buyer visits on the retailer’s same-store areas dropped by 2.6% yr over yr in the course of the quarter.
Throughout an earnings name in August, Dwelling Depot executives warned traders that clients proceed to delay funding bigger discretionary residence enchancment initiatives, similar to lavatory or kitchen remodels, as a consequence of considerations about excessive mortgage charges and basic financial uncertainty.
“Our customers still tell us that the rate environment is giving them pause on larger remodeling projects that would typically require debt financing,” stated Dwelling Depot Chief Monetary Officer Richard McPhail in the course of the name.
Regardless that the typical 30-year mortgage price within the U.S. has decreased barely over the previous few months, it stays above 6%, which has led many customers to place off buying new houses as affordability shrinks. Nonetheless, the housing market lately noticed a glimmer of hope.
How the U.S. housing market carried out in September 2025:
- Present-home gross sales spiked by 1.5% month over month in September.
- Unsold housing stock elevated 1.3% month over month.
- The median existing-home gross sales value rose by 2.1% yr over yr, reaching $415,200.
Supply: Nationwide Affiliation of Realtors
“Inventory is matching a five-year high, though it remains below pre-COVID levels,” stated NAR Chief Economist Lawrence Yun in a press launch. “Many homeowners are financially comfortable, resulting in very few distressed properties and forced sales. Home prices continue to rise in most parts of the country, further contributing to overall household wealth.”
Dwelling Depot makes alarming change to its provide chain
As Dwelling Depot battles weak demand, it has determined to step by step reduce its provide chain. At present, Dwelling Depot operates over 325 distribution facilities throughout the U.S. These areas are accountable for receiving, storing, packing, and transport merchandise to clients.
Nonetheless, Dwelling Depot subsidiary HD Provide has unveiled plans to close down its distribution facility in La Vergne, Tennessee, earlier than Jan. 9, 2026, in line with a latest WARN discover.
Dwelling Depot has observed main adjustments in buyer habits.
Jeff Greenberg/Getty Photographs
The closure will end in 108 HD Provide staff being laid off. In a press release to TripRanks, an HD Provide consultant stated it’s combining this facility with one other within the space.
“HD Supply continues to improve its leading maintenance, repair and operations distribution business,” stated the HD Provide consultant. “As part of that journey, we’ve made several strategic decisions around our network strategy and have made the decision to consolidate our La Vergne Distribution Center into another facility in La Vergne.”
Shortly after the announcement, Dwelling Depot’s inventory value dropped by about 2% on Oct. 29.
Associated: Dwelling Depot seals billion-dollar acquisition to win again buyers
The transfer from Dwelling Depot follows the closure of a distribution facility in Mexico, Missouri, on Oct. 26, leading to 61 layoffs. J.B. Hunt Transport additionally closed its facility on the Dwelling Depot Distribution Heart in Lithonia, Georgia, on Oct. 27, which prompted 74 staff to be laid off.
Final yr, Dwelling Depot even started trying to sublease 4 massive distribution facilities in Arizona, Illinois, New Jersey, and California.
The closures comply with a short lived surge in demand for residence enchancment initiatives in the course of the Covid pandemic. Throughout that point, many customers had extra time to deal with kitchen and toilet renovations, paint jobs, and so forth., as they labored remotely from residence.
As demand elevated, Dwelling Depot expanded its distribution heart community as a part of a $1.2 billion supply-chain funding introduced in 2018. The objective was to open 150 new services by 2023 to succeed in 90% of consumers with same- or next-day supply.
Dwelling Depot bets massive on latest acquisitions to spice up low gross sales
Whereas Dwelling Depot continues to make drastic adjustments to its provide chain community, additionally it is making daring billion-dollar acquisitions to draw extra Professional clients (residential and business skilled contractors) and encourage them to deal with massive residence enchancment initiatives.
In September, Dwelling Depot acquired GMS, a significant distributor of constructing merchandise similar to drywall, ceilings, metal framing, and different complementary merchandise, for $5.5 billion.
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In June final yr, Dwelling Depot additionally acquired constructing materials provider SRS Distribution, which focuses on landscaping, roofing, and pool building merchandise, for $18.25 billion.
“The addition of GMS further enhances SRS’s position as a leading multi-category building materials distributor, bringing differentiated capabilities, product categories and customer relationships that are highly complementary to SRS’s business today,” stated Dwelling Depot CEO Ted Decker in a September press launch.
“We want to serve the Pro across their entire project, and the combination of SRS and GMS will enable cross-selling synergies, strengthen our capabilities, and bring even more opportunities to grow with this important customer.”
Associated: Dwelling Depot declares handy service for purchasers
