Every year around this time I find myself wandering the aisles of my local home improvement warehouse, coffee in hand, wondering the same thing: who actually needs a pallet of power tools at 5 a.m.? This Black Friday feels different though. There’s a quiet urgency in the air that goes beyond the usual door-buster chaos.
The orange big-box giant has had a brutal 2025 so far, down more than eight percent while the broader market keeps marching higher. And yet here we are on the biggest shopping weekend of the year, watching contractors and weekend warriors alike load up flatbeds like the housing market never froze over.
The Real Question Hanging Over This Year’s Orange Aprons
Can a strong holiday season actually matter for a company that makes most of its real money when people buy, sell, or completely gut-renovate homes?
I’ve followed this stock for years, and I’ll tell you straight – the answer isn’t as simple as “yes” or “no.” Black Friday won’t fix everything, but it might tell us something important about where we are in this weird post-pandemic, high-rate hangover we’re all living through.
First, Let’s Talk About What Actually Moves This Stock
Everyone knows spring is the make-or-break season for home improvement retailers. That’s when the for-sale signs go up, when new homeowners suddenly discover their 1970s kitchen needs to disappear yesterday, when landscapers descend like locusts on mulch pallets.
But here’s something most casual investors miss: roughly 55% of Home Depot’s business now comes from professional contractors, not the DIY crowd browsing paint swatches on Saturday morning. That shift has been years in the making, and it changes everything about how we should think about holiday sales.
Pros don’t stop working in December. Roofers still need shingles when temperatures drop. Plumbers still get emergency calls when pipes freeze. Electricians still upgrade panels for people putting up those ridiculous Christmas light displays that can be seen from space.
The Appliance Angle Nobody Talks About
Walk into any store right now and you’ll see row after row of stainless steel gleaming under those harsh fluorescent lights. We’re talking deep discounts on everything from French-door refrigerators to smart washer-dryer sets.
Why does this matter? Because appliances represent one of the few categories where consumers actually pull the trigger during the holidays. New homeowners want that upgraded kitchen before hosting Thanksgiving next year. Renters moving into new places need to replace the avocado-green relics left by previous tenants.
“The gift center events and appliance promotions consistently deliver record engagement when we do them right.”
A merchandising executive said earlier this year
They’re not wrong. Last year’s holiday appliance push apparently broke internal records. When you pair that with the current promotional environment – brands practically giving away inventory to hit annual numbers – you get the recipe for something that could surprise to the upside.
The Professional Business: Where the Real Money Lives Now
Let’s talk about those big acquisitions everyone yawned through when they were announced.
Over twenty billion dollars spent buying distributor networks for roofing pros and building materials suppliers. Sounds boring until you realize these businesses come with something priceless: sticky customer relationships built on trade credit and daily delivery.
- Roofers don’t switch suppliers when someone offers them 2% better pricing
- They switch when their materials don’t show up at 7 a.m. when promised
- Home Depot now controls that delivery promise for thousands of professional accounts
Even better? These customers buy all year round. Weather events actually help – hurricanes, ice storms, wind damage – all translate to immediate roofing demand. The current pressure on new construction hurts, sure, but the repair and remodel side of professional spending has proven remarkably resilient.
Why Lowe’s Keeps Winning the Beauty Contest
I’m going to say something that might make some investors angry: right now, the market likes the other guy better.
The blue competitor somehow managed positive same-store sales while Home Depot posted declines. Their stock barely budged lower all year. Analysts keep whispering that maybe, just maybe, the moat isn’t as wide as everyone thought.
Here’s my take after watching both companies for decades: it’s mostly noise. The professional shift takes time to show up in comparable sales numbers. The investments being made today will look brilliant three years from now when rates finally normalize and housing turnover picks back up.
The Rate Cut Paradox Nobody Wants to Discuss
We were all supposed to be living in a refinancing boom by now. The Fed started cutting in September. Mortgage rates were going to plunge. Existing homeowners would unlock their golden handcuffs and list their houses. Home Depot’s registers would sing.
Except… bond yields went the wrong direction. Mortgage rates barely budged from their highs. The dreaded lock-in effect remains fully intact.
But something interesting happened recently. The ten-year Treasury finally started behaving. Mortgage rates ticked below seven percent for the first time in months. Applications for purchase mortgages – not just refis – started climbing.
Call me cautiously optimistic, but we might actually be on the cusp of the catalyst everyone has been waiting for since 2022.
What Black Friday Can Actually Tell Us
The company won’t release specific holiday numbers – they never do – but we’ll get clues.
- Are appliance ticket sizes trending higher than expected?
- Is professional traffic holding steady despite construction slowdowns?
- Are gift card sales (leading indicators for spring projects) showing unusual strength?
More importantly, management tone on the January earnings call will reveal everything. If they sound even mildly encouraged about early 2026 trends, you’ll want to pay attention.
The Bottom Line (Yes, I’m Going There)
Here’s what I see when I look at this stock right now: a company that spent the last few years deliberately transforming itself from a consumer cyclical into something much more defensive, at exactly the moment when consumer cyclicals got punished hardest.
The valuation reflects none of that transformation yet. The market still prices it like the old DIY-heavy retailer that lives and dies with housing turnover. But the reality on the ground – those contractor trucks filling parking lots at 6 a.m. – tells a different story.
Black Friday won’t fix eighteen months of pain. But it might just be the first sign that the worst is behind us.
Sometimes the best investments hide in plain sight, surrounded by orange buckets and two-by-fours, waiting for everyone else to remember that people always need to fix things – especially when rates finally come down and the For Sale signs start popping up again.
I’ll be watching those parking lots closely this weekend. Something tells me they might be fuller than anyone expects.
