Why This Matters to Distributors: Home Depot is building a specialty distribution competitor that combines physical branch density across five Pro verticals with an AI-powered procurement and fulfillment infrastructure designed specifically for complex contractor purchasing. The Mingledorff’s acquisition closes a geographic gap in HVAC
Home Depot last week completed its acquisition of Mingledorff’s, a leading wholesale distributor of heating, ventilation and air conditioning equipment with 42 locations across five Southeastern states, extending a professional distribution platform that now spans more than 1,300 SRS branches, 325 customer-facing warehouses and roughly 16,000 delivery assets.
The deal expands Home Depot’s total addressable market to $1.2 trillion and gives the company its first significant foothold in HVAC distribution, a market the company estimates at $100 billion. The acquisition landed in the same quarter Home Depot reported its fourth consecutive period of double-digit digital sales growth and deepening deployment of artificial intelligence across its Pro-facing operations — a combination that signals the company is advancing its professional distribution ambitions on two fronts at once.
“Mingledorff’s gives us an incredible opportunity to penetrate the national market for HVAC parts and supplies, leveraging the power of our enterprise to create a superior value proposition for the Pro customer,” said Ted Decker, chair, president and chief executive officer.
Mingledorff’s is a Carrier-focused distributor whose product portfolio and contractor customer base Home Depot described as highly complementary to SRS Distribution’s existing verticals in roofing, pool, landscape and interior building materials. Decker said Home Depot intends to build HVAC into a fifth SRS vertical, adding distribution geography through modest tuck-in acquisitions targeting key manufacturer partners. He also identified a parts opportunity that cuts across the regional exclusives that typically govern HVAC equipment distribution.
“While you have regional exclusives on distribution in certain geographies of a brand of the HVAC equipment, you’re actually able to sell parts nationwide,” Decker said. “So we look to leverage all the infrastructure — The Home Depot stores, our online capabilities and direct fulfillment centers — to start building a more robust parts distribution nationally.”
AI is moving to the center of how Home Depot manages the Pro purchase cycle. The company has consolidated its digital contractor tools under a single Pro Digital Workspace that includes an AI-powered material list builder, real-time delivery tracking, complex order scheduling tied to jobsite preferences and shared team visibility into purchase history. Ann-Marie Campbell, senior executive vice president, said the workspace functions as a product management tool for a contractor’s day-to-day workflow.
AI is also reshaping order fulfillment. Campbell said Home Depot has evolved its sourcing logic to route orders to the optimal store based on distance, inventory availability and speed of delivery — an approach the company calls “ship from best location.” The system has driven measurable reductions in order cancellations and improvements in fulfillment time. Customer satisfaction scores and likelihood-to-shop-again scores have both improved as a result.
“Our on-time and complete performance has never been better, and our customer satisfaction scores for deliveries, both on store and supply chain assets, are at record highs,” Campbell said.
Online sales across Home Depot’s digital platforms increased more than 10% compared to the first quarter of last year. A senior executive on the call said digital demand from complex Pro customers — large remodelers and small homebuilders managing multi-phase projects — is growing faster than the company’s B2C digital business.
The Pro segment outperformed the DIY consumer overall in the quarter. Pro Trade Credit continued to gain traction, with strong adoption among single and multifamily builders and large remodelers, particularly in longer lead-time categories such as windows, doors and appliances. The program offers 30-day payment terms from shipment rather than point of sale, a working capital advantage that contractors said distinguishes it from conventional purchase terms. Home Depot recently piloted Trade Credit online and plans to expand it to e-procurement platforms and construction management software integrations in the second quarter.
For the first quarter ended May 4, Home Depot reported total sales of $41.8 billion, an increase of 4.8% from the same period last year. Adjusted diluted earnings per share were $3.43, down approximately 3.7% from the first quarter of fiscal 2025. SRS contributed $4 billion in sales with positive total organic growth, though roofing comps ran slightly negative as the segment cycled through what Richard McPhail, executive vice president and chief financial officer, called the worst roofing shipment quarter since 2019. Despite the market pressure, SRS gained share from competing distributors, Decker said.
McPhail said SRS is on track to deliver mid-single-digit positive organic growth for the full year as storm-season comparisons improve in the back half. Home Depot reaffirmed its fiscal 2026 guidance, projecting total sales growth of between 2.5% and 4.5% and comp sales in a range of flat to 2%.
Cross-selling across the enterprise remains in early development but is gaining structure. Home Depot is targeting approximately $400 million in cross-sell run rate this year, tied largely to guaranteed contracts and commercial referrals moving between SRS, GMS, HD Supply and the core store network. The company said it expects to double that figure in fiscal 2027.
“We want best-in-class platforms that increasingly cross-sell together as we leverage the power of The Home Depot enterprise in what is still a highly fragmented space,” Decker said.
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