Lowe’s Builds Out $8.8 Billion Wholesale Play as DIY Slows

The challenges of today’s economy continue to weigh on consumer confidence.

Against that backdrop, retailers in mature markets are switching gears to unlock new value across non-consumer segments.

This is the case with home improvement company Lowe’s, which shared during its third-quarter 2025 earnings report Wednesday (Nov. 19) that it is betting financially and operationally on the long-term promise of professional contractors.

“[W]e look forward to enhancing our offering to Pro customers and creating more sustainable, long-term sales and profit expansion for the company,” Lowe’s Chairman, President and CEO Marvin R. Ellison said in a press release.

Professional contractors represent a relatively small share of overall traffic in Lowe’s stores but a disproportionately large share of revenue. Their purchases are project-based and recurring, tied to broader economic drivers such as new housing starts, commercial construction cycles and renovation activity.

Unlike DIY consumers whose spending can rise and fall with sentiment, media-driven inspiration cycles and discretionary budgets, contractor spending tends to be more stable and less correlated to short-term macro fluctuations.

“When we look at our pros, when we talk to our pros, they feel very confident in their business,” Ellison said during a conference call with analysts. “They feel confident in their access to credit and even feel a little bit more confident about their ability to hire and attract labor. We feel great about what our pros are telling us.”

Lowe’s put its money where its mouth is in August when it made an $8.8 billion bet on its Pro business by acquiring Foundation Building Materials (FBM). Executives said on the call Wednesday that the acquisition of FBM signals Lowe’s intent to serve these Pro customers with a level of depth and specialization typically associated with wholesale distributors rather than big-box retailers.

Read also: Lowe’s vs Home Depot: A Tale of Two Strategies for Professional Builders

Why Pro Customers Are Central to Lowe’s Future

FBM is a supplier of construction materials with strong relationships across the drywall, insulation and building envelope categories, which are areas that are essential to professional contractors but not traditionally core for big-box home improvement chains.

By integrating FBM’s branch network and capabilities into its operations, Lowe’s is effectively broadening its reach beyond the retail environment and into the supply chain that feeds construction job sites. It may be the most consequential shift in Lowe’s operating posture in years, enabling the company to control more of the Pro ecosystem, from specification to fulfillment.

Still, for the third quarter, Lowe’s net sales rose to $20.8 billion, up from $20.2 billion in the same period last year, while comparable sales ticked up just 0.4%, underscoring the challenging environment shaped by inflation pressures, elevated interest rates and a housing market in flux. The company lowered its full-year profit outlook, citing the headwinds defining the macro mix.

Online sales rose 11.4%, extending a multiyear pattern of digital expansion in an industry where eCommerce adoption historically lagged other retail categories. Home services revenue registered double-digit growth, reflecting customers’ increasing willingness to outsource installation and remodeling tasks. Pro sales continued their upward trajectory, supporting the narrative that the contractor segment is central to Lowe’s long-term aspirations.

See also: Seven in 10 Americans Live Paycheck to Paycheck. And Confidence Is Cracking

Lowe’s now faces the complex task of stitching together its expanded capabilities while preserving the operational simplicity that customers expect. Integrating wholesale distribution networks into a retail-based environment carries inherent challenges, such as aligning technology systems, consolidating supply chains, unifying pricing structures, and training associates on product categories that are more specialized than the typical retail assortment.

Much of Lowe’s narrative in the third quarter centers around intentionality. The company appears to be staking its future on structural changes, particularly the integration of wholesale supply capabilities, that could transform its relationship with professional customers. It is making this shift as industry growth is sluggish.

For a company competing in one of the most mature retail categories in the United States, the ability to find new frontiers matters. Lowe’s is betting that those frontiers lie with professional customers, and its third-quarter results show that it is willing to reshape itself to win them.

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